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Fama's Llamas has a weighted average cost of capital of 12 percent. The company's cost of equity is 18 percent, and its pretax cost of

Fama's Llamas has a weighted average cost of capital of 12 percent. The company's cost of equity is 18 percent, and its pretax cost of debt is 8 percent. The tax rate is 34 percent. What is the company's target debt-equity ratio?

a- 1.5

b-0.9375

c-0.8482

d-8929

e-0.9286

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