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Fama's Llamas has a weighted average cost of capital of 12 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 percent. The company's cost of equity is 16 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 33 percent. What is the company's target debt-equity ratio?

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