Problem 15-\" WACC and Optimal Capital Structure F. Pierce Products Inc. is considering changlng its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its Investment banker has indicated that the Dre-tax cost of debt under various possible Capital structures would he as follows: Market Debt- Market Equlty Market neut- Before- to-v-iue to-v-iue Do-Eqiillv Tax Con Ratio (we) Ratio on.) Ratio (0/5) of Baht (In) 0.0 1.0 0.00 7.0% 0.2 0.0 0.25 0.0 0.4 0.5 0.57 10.0 0.5 0.4 1.50 12.0 0.0 0.2 4.00 15.0 F. Pierce uses the CAPM to estimate its cost of common equity, rs and at the time of the anaiaysis me riskfree late is 6%, the market risk premium is 5%, and the company's tax rate is 35% E Pierce estimates that its beta now (which is 'unievered" because it currently has no debt) is 1. Based on this Informatlon, what is the rm's optimal capital structure, and what would be the welghted average cost of capital at the optimal capital structure? on not run hd intermediate calculations. Round your answers to two decimal places. DEBT % EQUlTV _ % waoc %