Desires weighted average cost of capital

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Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 12 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

A. 0.75

B. 0.58

C. 0.92

D. 0.65

E. 0.85

Reference no: EM131189854

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