Question
Fama's Llamas has a weighted average cost of capital of 13 percent. The company's cost of equity is 17.5 percent, and its pretax cost of
Fama's Llamas has a weighted average cost of capital of 13 percent. The company's cost of equity is 17.5 percent, and its pretax cost of debt is 8.5 percent. The tax rate is 35 percent. What is the company's target debt-equity ratio?
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0.6261
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0.6321
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0.602
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0.5719
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1
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Cost Benefit Analysis
Authors: Harry F. Campbell, Richard P.C. Brown
3rd Edition
1032320753, 9781032320755
