What is the company target debt-equity ratio

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Reference no: EM132047233

1. Fama's Llamas has a weighted average cost of capital of 11 percent. The company's cost of equity is 13 percent, and its pretax cost of debt is 8 percent. The tax rate is 35 percent. What is the company's target debt-equity ratio?

2. Sixx AM Manufacturing has a target debt-equity ratio of 0.42. Its cost of equity is 13 percent, and its cost of debt is 5 percent. If the tax rate is 37 percent, what is the company's WACC?

Reference no: EM132047233

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