Create weighted average cost of capital-debt-equity ratio

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Reference no: EM131062968

A firm wants to create a weighted average cost of capital (WACC) of 7.2 percent. The firm's cost of equity is 10 percent and its pre-tax cost of debt is 8 percent. The tax rate is 34 percent. What does the debt-equity ratio need to be for the firm to achieve its target WACC?

Reference no: EM131062968

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