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A firm's current balance sheet is as follows: S88 Assets $ 110 Debt $ 22 Equity a. What is the firm's weighted average cost of

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A firm's current balance sheet is as follows: S88 Assets $ 110 Debt $ 22 Equity a. What is the firm's weighted average cost of capital at various combinations of debt and equity, given the following information? Round your answers to one decimal place. Debt/Assets After-Tax Cost of Debt Cost of Equity Cost of Capital 0 % 6% 11% % % 10 6 11 20 7 11 % 30 7 12 % 40 8 13 % 50 10 14 % 60 11 15 % b. Construct a pro forma balance sheet that indicates the firm's optimal capital structure. Choose the best structure from the options analyzed in part a. Compare this balance sheet with the firm's current balance sheet. Round your answers to the nearest dollar. Assets $ 110 Debt $ Equity $ What course of action should the firm take? Round your answer to the nearest whole number

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