(A) Complete the WACC Table and the optimal mix if the company tax rate is 30% (your excel worksheet should provide this format and the computations to arrive at the missing variables) (B) How would you answer to part (A) change if the companies tax rate were 12%? (C) What does this tell us about the WACC mix? (D) What kind of mix would you recommend to an entity in a high tax environment?

(A) Complete the WACC Table and the optimal mix if the company tax rate is 30% (your excel worksheet should provide this format and the computations to arrive at the missing variables) % Debt 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% After-Tax Cost of Cost of Debt Cost of Debt % Equity WACC Equity (TEX %) 6.00% 0.00% 0% 10.00% 0.00% 6.50% 0.00% 10.50% 0.00% 6.50% 0.00% 0% 11.00% 0.00% 7.25% 0.00% 0% 11.50% 0.00% 7.50% 0.00% 0% 12.00% 0.00% 7.80% 0.00% 0% 13.00% 0.00% 8.60% 0.00% 0% 13.60% 0.00% 9.50% 0.00% 0% 14.80% 0.00% 10.50% 0.00% 0% 16.00% 0.00% 12.00% 0.00% 0% 19.00% 0.00% 15.00% 0.00% 0% 24.00% 0.00% (B) How would you answer to part (A) change if the companies' tax rate were 12%? (C) What does this tell us about the WACC mix? (D) What kind of mix would you recommend to an entity in a high tax environment