Fama's Llamas has a WACC of 10.5 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 7.3 percent. The tax rate is 23 percent. What is the company's target debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616. Debt-equity ratio
Fama's Llamas has a WACC of 10.5 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 7.3 percent. The tax rate is 23 percent. What is the company's target debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616. Debt-equity ratio
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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![Fama's Llamas has a WACC of 10.5 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 7.3 percent. The
tax rate is 23 percent. What is the company's target debt-equity ratio?
Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.
Debt-equity ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01d01b29-ede7-42ba-8dcd-8c0b18e94cc8%2F2222d8a6-9761-453c-b89d-e38484274e5a%2Fwkb3rs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Fama's Llamas has a WACC of 10.5 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 7.3 percent. The
tax rate is 23 percent. What is the company's target debt-equity ratio?
Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.
Debt-equity ratio
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