What debt-equity ratio is needed for the firm

Assignment Help Finance Basics

Reference no: EM13289571

Central Systems, Inc. desires a weighted average cost of capital of 8 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 11 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

1.50
1.40
1.67
1.60
1.33

Reference no: EM13289571

Questions Cloud

Explain paba was a common ingredient in sunscreen lotions : The product in the 3rd step of this multi-step synthesis, p-aminobenzoic acid (PABA), was a common ingredient in sunscreen lotions. PABA is such an effective sunscreen due to the many resonance structures that can be drawn for this molecule.

Accompany accounting for governmental and nonprofit entitie : City of Bingham Project Solution Page Images for Required journal entries

What is the weighted average flotation cost : The corporate tax rate is 30 percent. What is the weighted average flotation cost?

Find the magnitude of the accelerations of the objects : Two objects are connected by a light string that passes over a frictionless pulley, Find the magnitude of the accelerations of the objects

What debt-equity ratio is needed for the firm : Central Systems, Inc. desires a weighted average cost of capital of 8 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 11 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted a..

What is the degree of operating leverage : The accounting manager of Gateway Inns has noted that every time the inn's average occupancy rate increases by 3 percent, the operating cash flow increases by 7.11. What is the degree of operating leverage if the contribution margin per unit is 4?

Compute the maximum yield of benzocaine : Calculate the maximum yield of benzocaine, in grams, that you could obtain in this experiment based on the amount of p-toluidine used in step 1.

What is the planes velocity relative to the ground : An airplane goes North with an average speed of 100m/s, What is the plane's velocity relative to the ground

Determine the bode magnitude and phase responses for h : H(s) = ( 100 (s + 20) (s + 50) ) divided by ( ( s +8 ) ( s + 300 ) ( s + 5000 ) ) Determine the Bode magnitude and phase responses forH(s). Label all slopes and dB values.

User Account

All Pages