a. Given the following, determine the firm's optinal capital structure; Round your anwwers for captal structure to the neareut whole number and for the cost of capital to one decomal place. The eptimal capital structure: Q) 4 debe and 8 w equity with a cost of capial of If the firm uses 10s debt financing, it would be using substituting 8 financial leverape, Ar that combination the cost of capital is 6\%. The firm couid lower the cost of capital by c. What two reasons explain why debe is cheaper than equty? Debt is cheaper than equiry because interest expense 8 In addaion, equity investors bear riaki 10.0 percent? If the firme earns 8.496 on an investment, the stockholders wat earn What retum would steckhoiders receive? Round rour answer to one decimal place than their required 10.05 . 8