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| OPTIMAL CAPITAL STRUCTURE Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal debt to-capital

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| OPTIMAL CAPITAL STRUCTURE Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal debt to-capital ratio is somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels Debt/Capital Ratio Projected EPSProjected Stock Price 20% 30 40 50 $3.15 3.40 3.80 3.60 $33.00 36.50 38.00 33.00 Assuming that the firm uses only debt and common equity, what is Terrell's optimal capital structure? Round your answers to two decimal places. % debt % equity At what debt-to-capital ratio is the company's WACC minimized? Round your answer to two decimal places. 0%%

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