Problem $3$

Dallas Clinic has obtained the following estimates for its costs of debt and equity at various capital structures:

$\backslash$table$[[\backslash$table$[[$Proportion$],[$of Debt$]],$After$-$Tax Cost of Debt,Cost of Equity $(\%)],[0\%,-,12\mathrm{.}00],[20\%,4\mathrm{.}8\%,12\mathrm{.}90],[30\%,5\mathrm{.}1\%,13\mathrm{.}54],[40\%,6\mathrm{.}0\%,14\mathrm{.}40],[50\%,7\mathrm{.}2\%,15\mathrm{.}60]]$

a$.$ What is the firm's optimal capital structure? $($Hint: Complete the following table. When done, identified the optimal capital structure.$)$

$\backslash$table$[[\backslash$table$[[$Proportion$],[$of Debt$]],$After$-$Tax Cost of Debt,$\backslash$table$[[$Proportion$],[$of Equity$]],\backslash$table$[[$Corporate$],[$Cost of Capital$]],],[0\%,-,100\%,12\mathrm{.}00,0\mathrm{.}12\%$