Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost...
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Accounting
Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 17.5 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 31 percent.
What is the company's target debt-equity ratio?
A. 1
B. 0.6826
C. 0.6485
D. 0.7167
E. 0.7099
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