Problem $14-14$ WACC $[$LO$3]$

Ursala, Incorporated, has a target debt$-$equity ratio of $.85.$ Its WACC is $8\mathrm{.}1$ 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$.,32\mathrm{.}16.)$

b$.$ If instead you know that the aftertax cost of debt is $6\mathrm{.}2$ 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$.,32\mathrm{.}16.)$