Problemphils carvings inc wants to have a weighted average, Ask an Expert

Accounting

Problem:

Phil's Carvings, Inc. wants to have a weighted average cost of capital of 9.2 percent. The firm has an aftertax cost of debt of 6.4 percent and a cost of equity of 12.8 percent.

Required:

Question: What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital?

2.29
0.64
0.78
1.29
1.78

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170139

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