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Famas Llamas has a weighted average cost of capital of 9.5 percent. The companys cost of equity is 11 percent, and its pretax cost of

Famas Llamas has a weighted average cost of capital of 9.5 percent. The companys cost of equity is 11 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 40 percent. What is the companys target debtequity ratio?

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