Phil's Carvings,Inc. wants to have a weighted average cost of capital of 9%. The firm has an after-tax cost of debt of 5% and a cost of equity of 11%. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
A) .33
B) .40
C) .50
D) .60
E) .67
Correct Answer:
Verified
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