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An investment-banking firm has estimated the following after-tax cost of debt and the cost of equity for Christianson's Extravagant Tours Incorporated. What is Christianson's Extravagant

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An investment-banking firm has estimated the following after-tax cost of debt and the cost of equity for Christianson's Extravagant Tours Incorporated. What is Christianson's Extravagant Tours Incorporated's optimal capital structure? Proposition of debt Before-tax cost of debt Cost of equity 0% 10.4% 10% 3,5% 10.5% 20% 3,6% 10.8% 30% 3.8% 11.3% 40% 4.3% 12.0% 50% 5.0% 12.9% 60% 6.0% 14.1% 70% 7.2% 15.5% A. 20% debt and 80% equity financing B. 40% debt and 60% equity financing C. 70% debt and 30% equity financing D. 80% debt and 20% equity financing

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