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Each answer choice illustrates the relationship among Debt/Equity, rs, rd(1T), and WACC for a specific capital structure of a firm. Which Debt/Equity combination is the
Each answer choice illustrates the relationship among Debt/Equity, rs, rd(1T), and WACC for a specific capital structure of a firm. Which Debt/Equity combination is the optimal capital structure of this firm? (Multiple Choice) Question 6 options: Debt/Equity = 37.5%/62.5%, rs = 14.46%, rd(1T) = 6.88%, WACC = 11.62% Debt/Equity = 25%/75%, rs = 13.20%, rd(1T) = 5.56%, WACC = 11.29% Debt/Equity = 50%/50%, rs = 15.60%, rd(1T) = 8.40%, WACC = 12.00% Debt/Equity = 12.5%/87.5%, rs
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