A firm desires a wacc of 84 its cost of equity is 112 and, Ask an Expert

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A firm desires a WACC of 8.4%. It's cost of equity is 11.2% and it's pre tax cost of debt is 7.1%. The firm does not issue preferred stock. Tax rate is 38%. What must the debt-equity ratio of the firm be if it is to achieve it's target WACC?

A) .59 B) .63 C) .67 D) .70

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Financial Management, Finance

Category:- Financial Management
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