Assume That XYZ Corporation Is a Leveraged Company with the Following

Assume that XYZ Corporation is a leveraged company with the following information: K_l = cost of equity capital for XYZ = 13%
I = before-tax borrowing cost = 8%
T = marginal corporate income tax rate = 30%
Calculate the debt-to-total-market-value ratio that would result in XYZ having a weighted average cost of capital of 9.3 percent.

A) 35 percent
B) 40 percent
C) 45 percent
D) 50 percent