A firm wants to create a WACC of 11.2 percent.The firm's cost of equity is 16.8 percent and its pretax cost of debt is 8.7 percent.The tax rate is 35 percent.What does the debt-equity ratio need to be for the firm to achieve its target WACC?
A) .86
B) .67
C) 1.04
D) .94
E) 1.01
Correct Answer:
Verified
Q61: Bermuda Cruises issues only common stock and
Q62: Gulf Coast Tours currently has a weighted
Q63: The Five and Dime Store has a
Q64: Cromwell's Interiors is considering a project that
Q65: Piedmont Hotels is an all-equity firm with
Q67: The 5.25 percent preferred stock of Robert
Q68: Santa Claus Enterprises has 87,000 shares of
Q69: Orchard Farms has a pretax cost of
Q70: The Color Box uses a combination of
Q71: Western Electric has 21,000 shares of common
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents