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What debt-equity ratio will be required to meet shareholder

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Problem 1: The Border Crossing has no debt and a cost of capital of 12.2 percent. The shareholders would prefer to earn rate of return of 16.4 percent. What debt-equity ratio will be required to meet the shareholder's preference if the firm pays no taxes and can borrow at 6.2 percent?

Reference no: EM132777152

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