Danida Inc. has a target debt-equity ratio of 1.15. Its WACC is 7.5%, and the tax rate is 30%. If Danida's cost of equity is 12%, what is its pre-tax cost of debt?
A) 8.43%
B) 7.33%
C) 6.23%
D) 5.13%
E) 4.03%
Correct Answer:
Verified
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