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Each answer choice illustrates the relationship among Debt/Equity, rs, rd(1-T), 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(1-T), and WACC for a specific capital structure of a firm. Which Debt/Equity combination is the optimal capital structure of this firm? (Multiple Choice) Excel Link: Excel Sheet.xIsx Debt / Equity =12.5%/87.5%,rs=12.51%,rd(1T)=4.80%, WACC =11.55% Debt/Equity =50%/50%,rs=15.60%,rd(1T)=8.40%, WACC =12.00% Debt / Equity =37.5%/62.5%,rs=14.16%,rd(1T)=6.90%, WACC =11.44% Debt / Equity =0%/100%,rs=12.00%,rd(1T)=0, WACC =12.00% Debt / Equity =25%/75%,rs=13.20%,rd(1T)=5.40%, WACC =11.25%
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