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Company current debt to equity ratio

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Cindy Scott is an analyst with a firm in Vancouver, Canada. She is responsible for covering one company in the energy industry. Scott believes the domestic and global economies will grow slightly below average over the next two years, but she is also concerned about the possibility of a mild recession taking hold. She wants to study if the company's debt to equity ratio needs adjustment, so she calculates the following information for the company. The company's cost of equity is 12% and its pre-tax cost of debt is 4.5%. The weighted average cost of capital is 9.6%. The tax rate is 40%. What is the company's current debt to equity ratio?

Reference no: EM133069563

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