The tax rate is 40 percent what is the companys target


Fama’s Llamas has a weighted average cost of capital of 10.7 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 8.7 percent. The tax rate is 40 percent. What is the company’s target debt−equity ratio? (Do not round intermediate calculations and round your final answer to 4 decimal places, e.g., 32.1616.)

Debt−equity ratio

Request for Solution File

Ask an Expert for Answer!!
Financial Management: The tax rate is 40 percent what is the companys target
Reference No:- TGS02686265

Expected delivery within 24 Hours