Desires a weighted average cost of capital

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Red Zone Inc. desires a weighted average cost of capital of 5 percent. The firm has an after-tax cost of debt of 4.8 percent and a cost of equity of 15.2 percent (assume that these costs do not change with the capital structure). What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

Reference no: EM13913407

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