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MARR and Opportunity Cost Your boss, whose background is in financial planning, is concerned about the companys high weighted average cost of capital (WACC) of

MARR and Opportunity Cost

Your boss, whose background is in financial planning, is concerned about the companys high weighted average cost of capital (WACC) of 25%. He has asked you to determine what combination of debt-equity financing would lower the companys WACC to 15%. If the cost of the companys equity capital is 6% and the cost of debt financing is 25%, what debt-equity mix would you recommend?

The debt-equity mix should be___ % and ___ % equity financing.

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