Famas Llamas has a weighted average cost of capital of 8.9 percent. The companys cost of equity

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Fama’s Llamas has a weighted average cost of capital of 8.9 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.9 percent. The tax rate is 35 percent. What is the company’s target debt−equity ratio?

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Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Question Posted: Jun 20, 2023 02:33 AM

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Famas Llamas has a weighted average cost of capital of 8.9 percent. The companys cost of equity

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To determine Famas Llamas target debtequity ratio we need to use the weighted average cost of capita...View the full answer

Fundamentals of corporate finance

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