Capital Structure X Corporation has total assets of P100 million. Earnings before interest and taxes were P20 million and the tax rate was 35%. Given are the following leverage ratios and corresponding interest rates. Leverage Interest Rate (Debt / Total Assets) on Debt 1. 0 % -- 2. 10 16 % 3. 30 16 4. 50 18 5. 60 21 Calculate Littons rate of return on equity and WACC for each amount of debt. What is the optimal capital structure? If you were the finance manager, which capital structure would you choose? Justify.