a.
pretax cost of debt
=(8.1%-((1/1.65)*11%))/((0.65/1.65)*(1-23%))
=4.73%
b.
cost of equity
=(8.1%-((0.65/1.65)*3.8%))/((1/1.65))
=10.90%
the above is answer..
Clifford, Inc., has a target debt-equity ratio of .65. Its WACC is 8.1 percent, and the tax rate is 23 percent a. I...
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