Fama's Llamas has a weighted average cost of capital of 12 percent. The company's cost of equity is 16.5 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? (Do not round your intermediate calculations.)

Answers:

0.7494

0.678

1.2857

0.7423

0.7137