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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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