A firm desires a wacc of 84 percent its cost of equity is, Financial Management

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A firm desires a wacc of 84 percent its cost of equity is

A firm desires a WACC of 8.4 percent. Its cost of equity is 11.2 percent and its pre-tax cost of debt is 7.1 percent. The firm does not issue preferred stock. The tax rate is 38 percent. What must the debt- equity ratio of the firm be if it is to achieve its target WACC? a. .59 b. .63 c. .67 d. .70

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