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What is its pretax cost of debt

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Question - Clifford, Inc., has a target debt-equity ratio of .90. Its WACC is 8.2 percent, and the tax rate is 22 percent.

a. If the company's cost of equity is 11 percent, what is its pretax cost of debt?

b. If instead you know that the after-tax cost of debt is 6.3 percent, what is the cost of equity?

Reference no: EM133068667

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