What is its pretax cost of debt-what is the cost of equity

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Reference no: EM131548897

Kose, Inc., has a target debt–equity ratio of 1.20. Its WACC is 8.6 percent, and the tax rate is 35 percent.

a. If Kose’s cost of equity is 16 percent, what is its pretax cost of debt?

b. If instead you know that the aftertax cost of debt is 3.5 percent, what is the cost of equity?

Reference no: EM131548897

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