Question
Phil's Carvings, Inc. wants to have a weighted average cost of capital of 9%. The firm has an after-tax cost of debt of 5% and
Phil's Carvings, Inc. wants to have a weighted average cost of capital of 9%. The firm has an
after-tax cost of debt of 5% and a cost of equity of 11%. What debt-equity ratio is needed for
the firm to achieve its targeted weighted average cost of capital? (show steps and calculations please)
A. .33
B. .40
C. .50
D. .60
E. .67
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The Handbook Of Mergers And Acquisitions
Authors: David Faulkner, Satu Teerikangas, Richard J. Joseph
1st Edition
0199601461, 978-0199601462
