Question
Fama's Llamas has a weighted average cost of capital of 10.5 percent. The company's cost of equity is 17.5 percent, and its pretax cost of
Fama's Llamas has a weighted average cost of capital of 10.5 percent. The company's cost of equity is 17.5 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 33 percent. What is the company's target debt-equity ratio?(Do not round your intermediate calculations.)
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Entrepreneurial Finance
Authors: Philip J. Adelman; Alan M. Marks
6th edition
9780133099096, 133140512, 133099091, 978-0133140514
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