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The Spartan Co

Question 23

Multiple Choice

The Spartan Co. has an unlevered cost of capital of 11%,a cost of debt of 8%,and a tax rate of 35%. What is the target debt-equity ratio if the targeted cost of equity is 12%?


A) .44
B) .49
C) .51
D) .56
E) .62

Correct Answer:

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