7. What's the WACC? What's the formula for determining the weighted average cost of capital? Discuss how to calculate or find each variable. (For example, "The return on debt can be measured by the on the firm's long-term bonds," and so on.) Discuss both methods of determining the cost of equity.

Finally, how can making changes to the capital structure maximize the value of the firm? (Hint: How does the capital structure relate to the WACC, and how does the WACC relate to the discount rate used in a net present value (NPV) computation?)