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A company's cost of debt and equity at various levels of debt is presented below. Based on this data, what is the optimal capital structure
A company's cost of debt and equity at various levels of debt is presented below. Based on this data, what is the optimal capital structure - debt% and capital% - for this company? | |||||||||||||||
Cost of | Cost of | ||||||||||||||
Percent debt | Debt | Equity | |||||||||||||
0.00% | 0.00% | 11.00% | |||||||||||||
20.00% | 3.75% | 12.50% | |||||||||||||
40.00% | 5.00% | 13.50% | |||||||||||||
60.00% | 5.75% | 17.50% | |||||||||||||
80.00% | 6.75% | 21.00% |
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