Chapter 14 6 Fama's Llamas has a weighted average cost of capital of 8.9 percent. The company's cost of equity is 13 percent, and its pretax cost of debt is 6.2 percent. The tax rate is 23 percent. What is the company's target debt-equity ratio? (Do not round i calculations and round your answer to 4 decimal places, e.g., .1616.) 10 Hint