Question
Central Systems, Inc. desires a weighted average cost of capital of 8%. The firm has an aftertax cost of debt of 5.4 % and a
Central Systems, Inc. desires a weighted average cost of capital of 8%. The firm has an aftertax cost of debt of 5.4 % and a cost of equity of 15.2%. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
A. 0.38
B.0.44
C.1.02
D. 2.77
E. 3.63
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Advanced Finance
Authors: Michael Fardon
1st Edition
1872962319, 1872962173, 978-1872962313, 978-1872962177
