Question
Seduak has estimated the costs of debt and equity capital for various proportions of debt in its capital structure. % Debt After-tax cost of debt
Seduak has estimated the costs of debt and equity capital for various proportions of debt in its capital structure.
% Debt After-tax cost of debt Cost of equity
0% - 13.0%
10 5.4% 13.3
20 5.4 13.8
30 5.8 14.4
40 6.3 15.2
50 7.0 16.0
60 8.2 17.0
Based on these estimates, determine Seduaks optimal capital structure
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Financial Management Core Concepts
Authors: Raymond Brooks
4th Edition
134730417, 134730410, 978-0134730417
