Ivy Co. has bonds that are currently quoted at 120% of its face value. The bonds mature in 6 years and carry an 8 percent annual coupon. What is the company's after-tax cost of debt if the applicable tax rate is 21 percent? 4.16 percent 3.29 percent 5.27 percent 6.85 percent A firm wants to create a weighted average cost of capital (WACC) of 12 percent. The firm's cost of equity is 18 percent and its pre-tax cost of debt is 6 percent. The tax rate is 20 percent. What does the debt-equity ratio (D/E) need to be for the firm to achieve its target WACC? 0.55 0.45 0.82 1.22