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Fama’s Llamas has a WACC of 9.80 percent. The company’s cost of equity is 12.2 percent, and its cost of debt is 7.4 percent. The tax rate is 40 percent. What is Fama’s target debt-equity ratio?
Fama’s Llamas has a WACC of 9.80 percent. The company’s cost of equity is 12.2 percent, and its cost of debt is 7.4 percent. The tax rate is 40 percent. What is Fama’s target debt-equity ratio?