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Fama's Llamas has a weighted average cost of capital of 9.5 percent. The company's cost of equity is 15.5 percent, and its pre-tax cost of

Fama's Llamas has a weighted average cost of capital of 9.5 percent. The company's cost of equity is 15.5 percent, and its pre-tax cost of debt is 8.5 percent. The tax rate is 34 percent. What is the company's target debt-equity ratio?

0.98
0.92
0.89
1.01
1.54

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