What is its pretax cost of debt and cost of equity

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Reference no: EM131567416

Clifford, Inc., has a target debt–equity ratio of .72. Its WACC is 8.6 percent, and the tax rate is 30 percent.

a. If the company’s cost of equity is 11.2 percent, what is its pretax cost of debt?

b. If the aftertax cost of debt is 5.4 percent, what is the cost of equity?

Reference no: EM131567416

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