Home / Questions / Kose Inc has a target debtequity ratio of 120 Its WACC is 86 percent and the tax rate is 3...
Kose, Inc., has a target debt–equity ratio of 1.20. Its WACC is 8.6 percent, and the tax rate is 35 percent.
a. If Kose’s cost of equity is 16 percent, what is its pretax cost of debt?
b. If instead you know that the aftertax cost of debt is 3.5 percent, what is the cost of equity?
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