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Problem: Capital Structure and the WACC Percent Debt (%) After Tax Debt Cost (%) Cost of equity (%) 0 ----- 14 15 5 18 45
Problem: Capital Structure and the WACC
Percent Debt (%)
After Tax Debt Cost (%)
Cost of equity (%)
0
-----
14
15
5
18
45
9
22
67
12
25
78
16
30
Determine the WACC for each scenario
Determine the optimal mix of debt and equity.
Present your findings in a spreadsheet, and provide the rationale for your answers.
Problem: Capital Structure and the WACC
Percent Debt (%) | After Tax Debt Cost (%) | Cost of equity (%) |
0 | ----- | 14 |
15 | 5 | 18 |
45 | 9 | 22 |
67 | 12 | 25 |
78 | 16 | 30 |
Determine the WACC for each scenario
Determine the optimal mix of debt and equity.
Present your findings in a spreadsheet, and provide the rationale for your answers.
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