provide a calculation for each step with formulas.

On the basis this information, what is the companys optimal capital structure and what is the firms cost of capital at this optimal capital structure?

Company uses CAPM to estimate it's cost of equity. The risk free rate is 5% and the market risk premium is 6%. Elliott estimates that if it had no debt, it's beta would be 1.2. Company's tax rate is 40% and growth rate is zero. The company estimates it's free cash flow to be 30 mn. Bond rating | AAA Percent financed with debt 0.00 0.20 0.40 0.60 TAA Before tax cost of debt 7.0% 8.0% 10.0% 12.0% | 15.0% BBB | BB 0.80 Company uses CAPM to estimate it's cost of equity. The risk free rate is 5% and the market risk premium is 6%. Elliott estimates that if it had no debt, it's beta would be 1.2. Company's tax rate is 40% and growth rate is zero. The company estimates it's free cash flow to be 30 mn