Black and White has a cost of equity of 11 percent and a pre-tax cost of debt of 8.5 percent. The firms target weighted average cost of capital is 9 percent and its tax rate is 40 percent. What is the firms target debt-equity ratio?

A. 48.29

B. 51.28

C. 55.72

D. 57.56

E. 62.03

________

Suppose the returns on common stocks are approximately normally distributed. If the average return is 17% and a standard deviation of 12% what range of returns would one expect to see 95% of the time?

A. 5% to 29%

B. -7% to 41%

C. -19% to 53%

D. -19% to 53%

E. -27% to 53%