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Question 3 (20 marks) (a) B & B Ltd. has a weighted average cost of capital of 10.5%. The company's cost of equity is 15.5%,

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Question 3 (20 marks) (a) B & B Ltd. has a weighted average cost of capital of 10.5%. The company's cost of equity is 15.5%, and its pretax cost of debt is 8.5%. The tax rate is 34%. What is the company's target debt-equity ratio? (8 marks)

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