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An all-equity firm has a cost of capital of 12.8 percent and a tax rate of 23 percent. At the firm's target debt-equity ratio, the
An all-equity firm has a cost of capital of 12.8 percent and a tax rate of 23 percent. At the firm's target debt-equity ratio, the pretax cost of debt is 7.35 percent and the cost of equity is 15.07 percent. What is the target debt-equity ratio?
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