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# Bigelow, Inc. has a cost of equity of 13.56% and a pre-tax cost of debt of 7%. The required return on the assets is 11%. What is the firm's

Bigelow, Inc. has a cost of equity of 13.56% and a pre-tax cost of debt of 7%. The required return on the assets is 11%. What is the firm’s debt-equity ratio based on MM Proposition II with no taxes?
A) .60
B) .64
C) .72
D) .75
E) .80
The answer is B. .64, but how do you write the calculations? I can't get the right answer. I put .1356 = .11 + (.11-.07) x d/e but cannot get the correct answer. Please help.

Bigelow, Inc. has a cost of equity of 13.56% and a pre-tax cost of debt of 7%. The required return on the assets is 11%. What is the firm’s debt-equity ratio based on MM Proposition II with no...

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