Central Systems, Inc. desires a weighted average cost of capital of 9 percent

jagguarpaw January 17, 2017 0 Comments

Question: Central Systems, Inc. desires a weighted average c…

Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 13 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?