What is its pretax cost of debt and cost of equity

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Blue Bull, Inc., has a target debt-equity ratio of .84. Its WACC is 8.8 percent, and the tax rate is 40 percent.

If the aftertax cost of debt is 5 percent, what is the cost of equity?

If the company’s cost of equity is 12.4 percent, what is its pretax cost of debt?

Reference no: EM13942255

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