Black & White Ltd. Has a cost of equity of 11% and a pre-tax cost of debt of 8.5%. The firm's target Weighted average cost of capital is 9% and its tax rate is 35%. What is the firm's target debt-equity ratio?
A) 0.6203
B) 0.5756
C) 0.5572
D) 0.5113
Correct Answer:
Verified
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