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Takeoka's Sushi To Go has estimated the following cost of debt (before-tax) and cost of equity. Proportion of DebtBefore-tax Cost of DebtCost of Equity 30%9.5%14.4%
Takeoka's Sushi To Go has estimated the following cost of debt (before-tax) and cost of equity.
Proportion of DebtBefore-tax Cost of DebtCost of Equity
30%9.5%14.4%
40%9.7%15.2%
50%10.1%16.2%
60%11.8%18.5%
What is the cost of capital at Takeoka's optimal capital structure given the above information and a 40% effective tax rate?
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