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LeCompte Learning Solutions is considering making a change to its capital structure in hopes of increasing its value. The company's capital structure consists of debt

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LeCompte Learning Solutions is considering making a change to its capital structure in hopes of increasing its value. The company's capital structure consists of debt and common stock. In order to estimate the cost of the debt, the company has produced the following table: The company uses the CAPM to estimate its cost of common equity r. The risk free rate is at 5% and the market risk premium is 6%. LeCompte estimates that if it had no debt its beta would be 1.0. The company's tax rate is 40%. On the basis of this information, what is LeCompte's optimal capital structure, and what is the firm's cost of capital at this optimal capital structure

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