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Investment bankers provided estimates of ra for different capital structures as follows. Wa 20% 8% 30% 8.5% 40% 10% 5 pts The beta of the
Investment bankers provided estimates of ra for different capital structures as follows. Wa 20% 8% 30% 8.5% 40% 10% 5 pts The beta of the firm is 1. Tap is 6%, RPM is 6% and the tax rate is 40%. If the firm only has debt and common equity, which of the following is correct? O The WACC is minimized for Wd-20% and equals to 11.01% O The WACC is minimized for Wd -30% and equals to 11.01% O The WACC is minimized for Wd-30% and equals to 10.28% O The WACC is minimized for Wd 20% and equals to 10.28%
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