Fama's Llamas has a weighted average cost of capital of 10.4 percent. The company's cost of equity is 11 percent, and its pretax cost of debt is 6.3 percent. The tax rate is 22 percent. What is the company's target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 1616.) Debt-equity ratio

Fama's Llamas has a weighted average cost of capital of 10.4 percent. The company's cost of equity is 11 percent, and its pretax cost of debt is 6.3 percent. The tax rate is 22 percent. What is the company's target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 1616.) Debt-equity ratio

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 7P

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