Clifford, Inc., has a target debt-equity ratio of .85. Its WACC is 8.1 percent, and the...

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Clifford, Inc., has a target debt-equity ratio of .85. Its WACC is 8.1 percent, and the tax rate is 21 percent. a. If the company's cost of equity is 12 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 6.2 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of debt b. Cost of equity % % Clifford, Inc., has a target debt-equity ratio of .85. Its WACC is 8.1 percent, and the tax rate is 21 percent. a. If the company's cost of equity is 12 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 6.2 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of debt b. Cost of equity % %

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GIVEN Target Debt Equity 085 WACC 810 Tax rate 21 i Cost of Equ... View the full answer