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Kountry Kitchen has a cost of equity of 10.7 percent, a pretax cost of debt of 5.3 percent, and the tax rate is 40 percent.

Kountry Kitchen has a cost of equity of 10.7 percent, a pretax cost of debt of 5.3 percent, and the tax rate is 40 percent. If the company's WACC is 8.62 percent, what is its debtequity ratio?

.28

1.35

.38

.51

2.62

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