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%.

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The Answer of 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%.

Assume That XYZ Corporation Is a Leveraged Company with the Following