What is the firm target debt-equity ratio

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1. The Patterson Inc. has a cost of equity of 16.5 percent and a pre-tax cost of debt of 9.4 percent. The firm's target weighted average cost of capital is 12 percent and its tax rate is 30 percent. What is the firm's target debt-equity ratio?

0.69

0.85

0.74

0.46

2. Four years ago, you purchased 200 shares of Turlock Inc. stock. The annual returns have been 12 percent, 10 percent, -4 percent, and -2 percent, respectively for these four years. What is the variance of these returns?

0.0161

0.0033

0.0067

0.0078

Reference no: EM131360869

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