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    Capital Structure for The Mallory Corporation

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    The Mallory Corporation has a weighted average cost of capital of 11.5%. The company's cost of equity is 16%, and its cost of debt is 8.5%. The tax rate is 35%. What is the firm's debt-equity ratio?

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    Solution Preview

    Please see the response to your posting as below:
    Let X% of total capital is financed by equity.
    Therefore (100-X%) is financed ...

    Solution Summary

    Solution shows calculations of debt-equity ratio.