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A firm has a cost of equity 12% and a pre-tax cost of debt 9%. The firm's target weighted average cost of capital is 10%

A firm has a cost of equity 12% and a pre-tax cost of debt 9%. The firm's target weighted average cost of capital is 10% and its tax rate is 35%. What is the firm's target debt-equity ratio?

a.

48.19%
b.

52.43%
c.

57.56%
d.

45.72%
e.

42.93%

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