Pardon Me, Inc., recently issued new securities to finance a new TV show. The project cost $60 million, and the company paid 4.69million in flotation costs. In addition, the equity issued had a flotation cost of 8.4 percent of the amount raised, whereas the debt issued had a flotation cost of 5.1 percent of the amount raised.

If the company issued new securities in the same proportion as its target capital structure, what is the company's target debt-equity ratio?

(Choose correct answer)

0.93

0.66

0.53

0.41

0.78