Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. fama's llamas has a weighted average cost of capit

Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost...

70.2K

Verified Solution

Question

Accounting

Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 17.5 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 31 percent.

What is the company's target debt-equity ratio?

A. 1

B. 0.6826

C. 0.6485

D. 0.7167

E. 0.7099

Do not copy from Chegg and give complete answer with explanation

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Bolton Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on...

Finance
Q

A​ sparkling-water distributor wants to make up 200 gal of sparkling water to sell for $5.00...

Basic Math
Q

In a study of fast food accuracy on drive-thru orders, Burger King had 264 accurate orders...

Statistics
Q

When we study the effects of chronic stress on human health, most of our chronic stress...

Medical Sciences
Q

Consider the three phases of glycolysis 1 preparation and cleavage Gly 1 to Gly 5...

Biology
Q

If the market rate of interest is equal to the contract rate of interest,a. the...

Basic Math
Q

ndard Normal Table Page 2 0 1 2 3 S 6 2 7 8 1...

Statistics
Q

rights reserved 2 log 64 4 log 3 1 243 Date

Algebra
Q

Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company reports inventory...

Accounting
Q

Assume a company had no jobs in progress at the beginning of July and no...

Accounting
Q

List 10 more variables that are utilized to determine home prices, at least three for...

Accounting
Q

Sasbetono dan expected return o2 percent. What is the expected return on Stock Arther test...

Finance