What is company target debt-equity ratio

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Fama's Llamas has a weighted average cost of capital of 11 percent. The company's cost of equity is 15 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 32 percent. What is the company's target debt-equity ratio? (Do not round your intermediate calculations.)

a) 0.678

b) 0.7119

c) 0.7051

d) 1.1429

e) 0.6441

Reference no: EM131546300

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