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A firm wants to create a weighted average cost of capital (WACC) of 9.5 percent. The firm's cost of equity is 11 percent and its
A firm wants to create a weighted average cost of capital (WACC) of 9.5 percent. The firm's cost of equity is 11 percent and its pre-tax cost of debt is 9 percent. The tax rate is 35 percent. What does the debt-equity ratio need to be for the firm to achieve its target WACC?
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