Famas Llamas has a weighted average cost of capital of 9.5 percent. The companys cost of equity

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Fama’s Llamas has a weighted average cost of capital of 9.5 percent. The company’s cost of equity is 14 percent, and its pretax cost of debt is 6.1 percent. The tax rate is 25 percent. What is the company’s target debt-equity ratio?

(Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)

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Fundamentals Of Corporate Finance

ISBN: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Posted Date: Mar 05, 2024 11:43 PM

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Famas Llamas has a weighted average cost of capital of 9.5 percent. The companys cost of equity

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To calculate the target debtequity ratio for Famas Llamas we can use the formula for the weighted av... View the full answer

Fundamentals Of Corporate Finance

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