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Targeted weighted average cost of capital

Phil's Carvings, Inc. wants to have a weighted average cost of capital of 7.1 percent. The firm has an aftertax cost of debt of 4.3 percent and a cost of equity of 8.6 percent. What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital?

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Finance Basics: Targeted weighted average cost of capital

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