The finance director of Optimality Corp. wishes to find the firm's optimal or target capital structure. The cost of debt varies with the firm's credit rating, which largely depends on the firm's level of gearing (by market values) among other factors. You are provided with the following information. From the publicly available information, the firm's enterprise value (EV) is $14.32B while market cap is $12.9B. The equity beta is 0.916 . The 1 long term interest rate on US treasury bonds is 4% while the market return has historically averaged 10% per year. The firm's marginal corporate tax rate is 30%. Required Estimate the firm's optimal weighted average cost of capital (WACC). State clearly any assumption you make. Should the firm adopt the optimal capital structure? Show all your computations to earn full credit. (15 points)