Aronment 4-202020-FINO 4423 - FINANCIAL Chapter 16 - Capital Structure Decisions HW 04 Please refer to the In-Class Example 23, which is also the "Choosing the optimal Capital Structure example starts on Slide 28. Our calculations conduded that the minimum WACC was reached at 30%. In fact, the values of the WACC for three consequent debt ratios were as following: Wd WACC 20% 11.28% 30 1 101% 401 1 1001 You may remember from our discussions in class that this calculation did a very superficial analysis, in the sense that it only considered 20% 30% 40%, and so on, but did not go more detailed to the Debt Ratios between 20%-30%. Maybe 25% debt was providing a better WACC, we don't know that yet. So, at this HW assignment, we will figure that out. Among the 20%, 30%, 40% choices, we have the minimum WACC at 30%. It looks like from 20% to 30%, WACC always decreased, and from 30% to 40% WACC always increased. However, we need to consider the following scenarios: . Maybe the minimum WACC was between 20%-30%, so from 20%, WACC actually first decreased, reached the minimum, and started to increase towards the 30% ratio. So maybe, minimum WACC is lower than 11.01% and it is reached between 20%-30% Maybe the minimum WACC was between 30% 40%, so from 30%, WACC actually continued to decrease, then reached the minimum, and started to increase towards the 40% ratio. So maybe, minimum WACC is lower than 11.01% and it is reached between 30%-40% Considering all this, please use Microsoft Excel to calculate the optimal capital structure at which you get the actual minimum WACC. To be able to do so, you need to make the following assumptions We know that 8%, 8.5%, 10% for W, 20%, 30%, 40%, respectively. But now, you need to, for example, know there when wr25% Therefore, simply assumera will be equally distributed between 8%-85% for 20%