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What is its pre-tax cost of debt

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Reference no: EM133093157

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

If ABC Ltd's cost of equity is 14%, what is its pre-tax cost of debt?

If instead you know that the after-tax cost of debt is 6.8%, what is the cost of equity?

Reference no: EM133093157

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