If jungles cost of equity is 16 percent what is the pretax

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Reference no: EM13621515

Jungle, Inc., has a target debt-equity ratio of 0.81. Its WACC is 11 percent, and the tax rate is 34 percent.

Required:

(a) If Jungle's cost of equity is 16 percent, what is the pretax cost of debt? (Do not round your intermediate calculations.)

(b) If instead you know that the aftertax cost of debt is 6.9 percent, what is the cost of equity?

Reference no: EM13621515

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