Welling Inc. has a target debt-equity ratio of .85. Its WACC is 9.9%, and the tax rate is 35%.

a.If the company's cost of equity is 14%, what is its pre-tax cost of debt?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Cost of debt7.81

Numeric Response

Edit Unavailable.7.81correct.

%

b.If instead you know that the after-tax cost of debt is 6.8%, what is the cost of equity?(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Cost of equity%