Question
Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 16 percent, and its pretax cost of
| Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 16 percent, and its pretax cost of debt is 8.5 percent. The tax rate is 33 percent. What is the company's target debt-equity ratio?
|
Multiple Choice
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0.875
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0.54
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0.4886
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0.5349
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0.5143
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Introduction To Finance
Authors: Lawrence J Gitman, Jeff Madura
1st Edition
0201635372, 9780201635379
