Ursala, Inc., has a target debt-equity ratio of .65. Its WACC is 10.4 percent, and the tax
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Ursala, Inc., has a target debt-equity ratio of .65. Its WACC is 10.4 percent, and the tax rate is 23 percent.
a. If the company’s cost of equity is 14 percent, what is its pretax cost of debt?
b. If instead you know that the after-tax cost of debt is 5.8 percent, what is the cost of equity?
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Related Book For 
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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