Firm A wants to have a weighted average cost of capital of 10.5 percent. The firm has an aftertax cost of debt of 6 percent and a cost of equity of 12. percent. What debt-equity ratio (i.e., B/S) is needed for the firm to achieve its targeted weighted average cost of capital? Hint: Weight of debt=debt-equity ratio (1+debt-equity ratio); Weight of equity=1-weight of debt). 1. 1 2. 2/3 3. 1/2 4. 1/3