What is the cost of equity, Finance Basics

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What is the cost of equity

Problem

Ursala, Incorporated, has a target debt-equity ratio of 1.15. Its WACC is 8.6 percent, and the tax rate is 21 percent.

i. If the company's cost of equity is 14 percent, what is its pretax cost of debt?
ii. If instead you know that the aftertax cost of debt is 6.1 percent, what is the cost of equity?

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