Finding the Capital Structure Famas Llamas has a weighted average cost of capital of 11.5 percent. The
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Finding the Capital Structure Fama’s Llamas has a weighted average cost of capital of 11.5 percent. The company’s cost of equity is 16 percent, and its cost of debt is 8.5 percent.
The tax rate is 35 percent. What is Fama’s debt–equity ratio?
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