Problem: Kose, Inc., has a target debt-equity ratio of 0.74. Its WACC is 12 percent, and the tax rate is 35 percent.
1.) If Kose's cost of equity is 14.5 percent, what is its pretax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
2.) If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))