Afirm's current balance sheet is as follows: Assets $120 Debt $36 Equity $84 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 094 11% 10 11 % 20 11 30 12 * 40 1) 50 10 14 50 11 15 b. Construct a proforma 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 nearestolar Assets $120 Debt Equity What course of action should the firm take7 Round your answer to the nearest whole number Since the firm is currently using debt financing, B at its optimal capital structure and As a firm initially substitutes debt for equity financing, what happens to the cost of capital? The cost of capital initially dla firm uses too much debt financing, why does the cost of capitale If a firm uses too much debt financing, the firm becomes at Tinancially leveraged and risk This causes the interest rate to en B. These changes in the cost of debt and equity cause the cost of capital to and the cost of equity to Grade Now Save A Continue