A ﬁrm has an unlevered cost of capital of 10%, a cost of debt of 9%, and a tax rate of 34%. If it desires a cost of equity of 14%, what is its target debt/equity ratio?
A) 2.49
B) 3.89
C) 4.68
D) 5.14
E) 6.06

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The Answer of A ﬁrm has an unlevered cost of capital of 10%, a cost of debt of 9%, and a tax rate of 34%. If it desires a cost of equity of 14%, what is its target debt/equity ratio?
A) 2.49
B) 3.89
C) 4.68
D) 5.14
E) 6.06

A ﬁRm Has an Unlevered Cost of Capital of 10