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2. Problem 13.02 (Optimal Capital Structure) eBook Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the

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2. Problem 13.02 (Optimal Capital Structure) eBook Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal debt-to-capital ratio is somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels: Debt/Capital Ratio Projected EPS Projected Stock Price 20% $3.00 $35.00 30 3.60 35.75 40 3.70 36.75 50 3.65 32.50 Assuming that the firm uses only debt and common equity, what is Terrell's optimal capital structure? Choose from the options provided above. Round your answers to two decimal places. % debt % equity At what debt-to-capital ratio is the company's WACC minimized? Choose from the options provided above. Round your answer to two decimal places. %

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