Question
A firm has a WACC equal to 11.5 percent, the pretax cost of debt is 6.5 percent and the cost of equity is 15 percent.
A firm has a WACC equal to 11.5 percent, the pretax cost of debt is 6.5 percent and the cost of equity is 15 percent. The tax rate is 35%. Given these figures, what is the firm's debt-equity ratio?
a.0.22
b.0.72
c.0.48
d.0.50
e.0.65
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
