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Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information: Debt/assets kd(Cost of Debt) ke(Cost of

Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information: Debt/assets kd(Cost of Debt) ke(Cost of Equity) .30 .10 .125 .40 .105 .13 .50 .11 .135 .60 .117 .142 .70 .13 .155 Based on this information, what capital structure (debt/asset ratio) should management accept? Assume the marginal tax rate is 40%

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