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Fama's Llamas has a weighted average cost of capital of 12 percent

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Fama's Llamas has a weighted average cost of capital of 12 percent. The company's cost of equity is 17 percent, and its pretax cost of debt is 9 percent. The tax rate is 34 percent. What is the company's target debt-equity ratio? (Do not round your intermediate calculations.)

Multiple Choice

0.8663

0.8251

1.6667

0.7838

0.8581