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Fama's Llamas has a weighted average cost of capital of 9 percent. The company's cost of equity is 12 percent, and its pretax cost of

Fama's Llamas has a weighted average cost of capital of 9 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 8 percent. The tax rate is 40 percent. What is the company's target debt-equity ratio?

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