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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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