a. The managing director of your firm is thinking aloud about the optimal capital structure. Being the Head of Finance in your company, you are required to provide advice to the board of directors regarding the optimal capital structure for your company which currently has zero debt and with a corporate tax rate of 40per cent. Interpret your advice using both static theory and peck-order theory in your own words (not more than 600 words). The marks of your answers will be awarded based on: Relevance of answers and logical developed interpretation of the proposed answers. Originality and creativity of analysis behind every interpretation provided. Overall presentation including word limit, clarity of writings and grammars. . - b. Larey Co. has an unlevered cost of capital of 12.5 percent, a total tax rate of 25 percent, and expected earnings before interest and taxes of $34,280. The company has $65,000 in bonds outstanding that sell at par and have a coupon rate of 7.3 percent. What is the cost of equity and WACC? [Note: Please provide your answers in four decimal places]