a. Given the following, determine the firm's optimal capital structure: Round your answers for capital structure to the nearest whole number and for the cost of capital to one decimal place. The optimal capital structure: % debt and % equity with a cost of capital of % b. If the firm were using 0 percent debt and 100 percent equity, what would that tell you about the firm's use of financial leverage? Round your answer for the cost of capital to one decimal place. If the firm uses 0% debt financing, it would be using financial leverage. At that combination the cost of capital is \%. The firm could lower the cost of capital by substituting c. What two reasons explain why debt is cheaper than Debt is cheaper than equity because interest expense - In addition, equity investors bear risk. d. If the firm were using 20 percent debt and 80 percent equity and earned a return of 8.3 percent on an investment, would this mean that stockholders would receive less than their required return of 10.0 percent? If the firm earns 8.3% on an investment, the stockholders will earn than their required 10.0%. What return would stockholders receive? Round your answer to one decimal place. % b. If the firm were using 0 percent debt and 100 percent equity, what would that tell you about the firm's use of financial le decimal place. If the firm uses 0% debt financing, it would be using financial leverage. At that combination the cost of capit by substituting: c. What two reasc lebt is cheaper than equity? Debt is cheapel ause interest expense . In addition, equity investors bear d. If the firm were using 20 percent debt and 80 percent equity and earned a return of 8.3 percent on an investment, would required return of 10.0 percent? If the firm earns 8.3% on an investment, the stockholders will earn than their required 10.0%. What return would stockholders receive? Round your answer to one decimal place. % using 0 percent debt and 100 percent equity, what would that tell you about the firm's use of financial leverage? Round your answer for es 0% debt financing, it would be using financial leverage. At that combination the cost of capital is sons explain why debt is cheaper than equity? er than equity because interest expense - In addition, equity investors bear risk. using 20 percent debt and 80 percent 8.3 percent on an investment, would this mean that stockholders of 10.0 percent? rns 8.3% on an investment, the stockhol their required 10.0%. would stockholders receive? Round your answer to one decimal place. % % equity with a cost of capital of % equity, what would that tell you about the firm's use of financial leverage? Round your answer for the cost of ca financial leverage. At that combination the cost of capital is %. The firm could lower equity? In addition, equity investors bear risk. ent equity and earned a return of 8.3 percent on an investment, wot n that stockholders would receive holders will earn than their required 10.0%. ur answer to one decimal place. ur answers for capital structure to the nearest whole number and for the cost of capital to one decimal place. capital structure: % debt and % equity with a cost of capital of % were using 0 percent debt and 100 percent equity, what would that tell you about the firm's use of financial leverage? lace. uses 0% debt financing, it would be using financial leverage. At that combination the cost of capital is reasons explain why debt is cheaper than equity? eaper than equity because interest expense . In addition, equity investors bear were using 20 percent debt and 80 percent equity and earned a return of 8.3 percent on an investment, would this m eturn of 10.0 percent? earns 8.3% on an investment, the stockholders will earn than their required 10.0%. in would stockholders receive? Round your answer to one ice