The Border Crossing has no debt and a cost of capital of 12.2 percent.The shareholders would prefer to earn rate of return of 16.4 percent.What debt-equity ratio will be required to meet the shareholder's preference if the firm pays no taxes and can borrow at 6.2 percent?
A) 67%
B) 33%
C) 54%
D) 46%
E) 70%
Correct Answer:
Verified
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