FIN/571 – Central Systems, Inc. desires a weighted average cost
Subject: Business   / Finance
Question
Central Systems, Inc. desires a weighted average cost of capital of 10 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 12 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
.67
.60
.50
.40
.33
