What debt-equity ratio to keep the wacc


A firm has an expected return on equity of 16% and an after-tax cost of debt of 8%. What debt-equity ratio should be used in order to keep the WACC at 12%?

A) .50

B) .75

C) 1.00

D) 1.50

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Accounting Basics: What debt-equity ratio to keep the wacc
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