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What is its pre-tax cost of debt

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Reference no: EM133166099

Question - Encor Ltd. has a target debt-equity ratio of 0.59. Its WACC is 9.1%, and the tax rate is 28%.

Required -

(a) If Encor Ltd's cost of equity is 11%, what is its pre-tax cost of debt?

(b) If instead, you know that the after-tax cost of debt is 6.5%, what is the cost of equity?

Reference no: EM133166099

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