A Firm Wants to Create a Weighted Average Cost of Capital

A firm wants to create a weighted average cost of capital (WACC) of 10.4 percent. The firm's cost of equity is 14.5 percent and its pre-tax 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