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F. Pierce Products Inc. is considering changing its capital structure. F. Pierce rently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows: Market Debt Market Equity to-Value Ratio (wa) 0.0 DEBT 0.2 0.4 0.6 to-Value Ratio (ws) EQUITY WACC 1.0 0.8 0.6 Market Debt- to-Equity Ratio (D/S) 0.00 0.25 0.67 0.4 0.0 0.2 4,00 15.0 F. Pierce uses the CAPM to estimate its cost of common equity, ty and at the time of the analaysis the risk-free rate is 6%, the market risk premium is 456, and the company's tax rate is 35%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.3. Based o this information, what is the firm's optimal capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermediate calculations. Round your answers to two decimal places. Before- Tax Cost of Debt (ra) 7.0% 1.50) 8.0 10.0 12.0