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Pre-tax cost of debt-walter distributors

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Reference no: EM132641831

Walter s Distributors have a cost of equity of 13.84% and an unlevered cost of capital of 12%. The company has $5,000 in debt that is selling at par value. The levered value of the firm is $12,000 and the tax rate is 34%. What is the pre-tax cost of debt?

Reference no: EM132641831

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