Multiple Choice
Rosa's has a weighted average cost of capital of 11.73 percent. The cost of equity is 15.8 percent and the pretax cost of debt is 7.6 percent. The tax rate is 21 percent. What is the target debt-equity ratio?
A) .89
B) 1.87
C) 1.41
D) .53
E) .71
Correct Answer:
Verified
Correct Answer:
Verified
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