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Finance

Problem:

Black and White has a cost of equity of 11 percent and a pre-tax cost of debt of 8.5 percent. The firm's target weighted average cost of capital is 9 percent and its tax rate is 35 percent.

Required:

What is the firm's target debt-equity ratio?

a. 48.29

b. 51.13

c. 55.72

d. 57.56

e. 62.03

Note: Please provide equation and explain comprehensively and give step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162951

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