DAVC Questions Problem 14.02 (Optimal Capital Structure) 1. Question 1 of 5 2. Check My Work (3 remaining) 3. B eBook 4. 5. Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal debt-to-capital ratio is somewhere between O 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels: Debt/Capital Ratio Projected EPS Projected Stock Price 20% $3.00 $33.25 30 3.60 35.75 40 3.80 38.00 50 3.60 32.25 Assuming that the firm uses only debt and common equity, what is Terrell's optimal capital structure? Choose from the options provided above. Round your answers to two decimal places. % debt % equity At what debt-to-capital ratio is the company's WACC minimized? Choose from the options provided above. Round your answer to two decimal places. % Check My Work (3 remaining) 0 Icon Key