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Zimmer Biomet Corporation in Warsaw Indiana produces orthopedic devices (artificial hips, knees, and shoulders). The WACC at the end of 2017 when the corporate tax

Zimmer Biomet Corporation in Warsaw Indiana produces orthopedic devices (artificial hips, knees, and shoulders). The WACC at the end of 2017 when the corporate tax rate was 35%, was 8.73%. President Trumps new tax plan lowers the corporate tax rate to 21% in 2018. Zimmer Biomets Board of Directors has decided that the want to keep the WACC the same in 2018 by changing the Debt to Equity ratio. Assume: Rd = 0.08, Re = 0.13, and the original debt to equity ratio (in 2017) was 0.5. What does the new, 2018, Debt to Equity ratio need to be?

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