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F. Pierce Products Inc, is considering changing its capital structure. F, Pierce currently has no debt and no preferred stock, but it would like to

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F. Pierce Products Inc, is considering changing its capital structure. F, Pierce currently 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 shieid. its investment banker has indicated that the pre-tax cost of debt under various possible capial structures would be as foliewst - Use the exact valoe of 2/3 in your calculations. F. Pierce uses the Capm to estimate its cost of commen equity, rsand at the time of the analyysis the risk-free rate is 5%, the market risk premium is 6%, and the company's tax rate is A0ss. F. Plerce estimates that its beta now (which is "unlevered" because it currently has no debt) is o.85. Based on this information, what is the firm's optimai capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermed ate calculations, Rourid your answers to two decimal piaces

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