Problem 21-03 A firm's current balance sheet is as follows: swered Partially Correct a. What is the firm's weighted-average cost of capital at various combinations of debt and equity, qiven the following information? Round your answers to one decimal place. Assets$110DebtEquity$$ What course of action should the firm take? Round your answer to the nearest whole number. Since the firm is currently using W debt financing, it its optimal capital structure and c. As a firm initially substitutes debt for equity financing, what happens to the cost of capital? The cost of capital initially d. If a firm uses too much debt financing, why does the cost of capital rise? If a firm uses too much debt financing, the firm becomes financially leveraged and riskier. This causes the interest rate to and the cost of equity to cost of capital to (3. Problem 21-03 A firm's current balance sheet is as follows: swered Partially Correct a. What is the firm's weighted-average cost of capital at various combinations of debt and equity, qiven the following information? Round your answers to one decimal place. Assets$110DebtEquity$$ What course of action should the firm take? Round your answer to the nearest whole number. Since the firm is currently using W debt financing, it its optimal capital structure and c. As a firm initially substitutes debt for equity financing, what happens to the cost of capital? The cost of capital initially d. If a firm uses too much debt financing, why does the cost of capital rise? If a firm uses too much debt financing, the firm becomes financially leveraged and riskier. This causes the interest rate to and the cost of equity to cost of capital to (3