1. Fama's Llamas has a weighted average cost of capital of 11 percent. The company's cost of equity is 13 percent, and its pretax cost of debt is 8 percent. The tax rate is 35 percent. What is the company's target debt-equity ratio?
2. Sixx AM Manufacturing has a target debt-equity ratio of 0.42. Its cost of equity is 13 percent, and its cost of debt is 5 percent. If the tax rate is 37 percent, what is the company's WACC?