What is its pretax cost of debt, Corporate Finance

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What is its pretax cost of debt

Problem

Butler, Inc., has a target debt-equity ratio of 1.50. Its WACC is 8 percent, and the rate is 23 percent.

1. If the company's cost of equity is 11.9 percent, what is its pretax cost of debt?
2. If instead you know that the aftertax cost of debt is 4.1 percent, what is the cost of equity?

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Corporate Finance: What is its pretax cost of debt

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Corporate Finance: What is its pretax cost of debt

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