Famas target debt-equity ratio


Problem:

Fama's Llamas has a WACC of 10.1 percent. The company's cost of equity is 12.8 percent, and its cost of debt is 7.1 percent. The tax rate is 34 percent.

Required:

Question: Question: What is Fama's target debt-equity ratio?

Note: Please provide reasons to support your answer.

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Accounting Basics: Famas target debt-equity ratio
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