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erichandley | 00:42 Fri 06th Feb 2009 | Business & Finance
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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%?
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Since the WACC is the simple average of the cost of equity and after tax cost of debt, the firm must be using equal parts debt and equity.

That's odd erichandley, I was wondering the same thing too.

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