Kose Inc. has a target debt-to-equity ratio of 0.64. Its WACC is 12.1 percent, and the...

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Kose Inc. has a target debt-to-equity ratio of 0.64. Its WACC is 12.1 percent, and the tax rate is 34 percent. a. If Kose's cost of equity is 15 percent, what is its pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Pre-tax cost of debt % b. If instead you know that the after-tax cost of debt is 7.3 percent, what is the cost of equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of equity % Kose Inc. has a target debt-to-equity ratio of 0.64. Its WACC is 12.1 percent, and the tax rate is 34 percent. a. If Kose's cost of equity is 15 percent, what is its pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Pre-tax cost of debt % b. If instead you know that the after-tax cost of debt is 7.3 percent, what is the cost of equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of equity %

Answer rating: 100% (QA)

a To find the pretax cost of debt we can use the weighted average cost of capital WACC formula WACC ... View the full answer