Question

Kose Inc. has a target debt-to-equity ratio of 0.65. Its WACC is 11.2 percent, and the tax rate is 35 percent.
a. If Kose’s cost of equity is 15 percent, what is its pre-tax cost of debt?
b. If instead you know that the after-tax cost of debt is 6.4 percent, what is the cost of equity?
Finding the Weighted Average Cost of Capital


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  • CreatedJune 17, 2015
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