Target debt–equity ratio-what is its pretax cost of debt

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Reference no: EM13921949

Kose, Inc., has a target debt–equity ratio of 1.55. Its WACC is 9.8 percent, and the tax rate is 40 percent.

If Kose’s cost of equity is 15 percent, what is its pretax cost of debt?

If instead you know that the aftertax cost of debt is 6.8 percent, what is the cost of equity?

Reference no: EM13921949

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