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Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 4 percent and

Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 4 percent and a cost of equity of 10 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

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