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A firm has a target debt-equity ratio of .5, but it plans to finance a new project with all debt. What debt-equity ratio should be used when calculating the project's flotation costs

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abiolataiwo2015

The  debt-equity ratio that should be used when calculating the project's flotation costs is: 0.5.

Debt-equity ratio

Since the firm has  target debt-equity ratio of .0.5 which means that the debt-equity ratio that should be used when calculating the project's flotation costs should be 0.5.

Debt-equity ratio Formula is:

Debt-equity ratio=Total debt/Total shareholders' equity

Therefore the firm should used 0.5 to calculate the project's flotation costs.

Learn more about Debt-equity ratio here:https://brainly.com/question/17233079

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