Variable Ratios and Fixed Rates Case 2 3 1 D/(D + E) = WD 0.000% 40.000% 80.000% |rp 5.500% 7.000% 15.000% Tax Rate 40.000% 40.000% 40.000% re (from CAPM) 8.000% 10.000% 19.000% Question 2 What is the WACC (rwacc) for Case 2? Question 3 Based on these three cases, what is the entity's optimal WACC? Question 4 What is the corresponding D/(D+E) ratio