Finding the Capital Structure
Fama’s Llamas has a weighted average cost of capital of 10.2 percent. The company’s cost of equity is 14 percent, and its cost of debt is 8.2 percent. The tax rate is 35 percent. What is Fama’s debt–equity ratio? (Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616))
Debt−equity ratio