A firm wants to create a WACC of 10.4 percent.The firm's cost of equity is 14.5 percent and its pretax cost of debt is 8.5 percent.The tax rate is 34 percent.What does the debt-equity ratio need to be for the firm to achieve its target WACC?
A) 0.51
B) 0.57
C) 0.62
D) 0.70
E) 0.86
Correct Answer:
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