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Your firm has estimated the costs of debt and equity capital (with bankruptcy and agency costs) for various proportion of debt in its capital structure:

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Your firm has estimated the costs of debt and equity capital (with bankruptcy and agency costs) for various proportion of debt in its capital structure: Proportion of Debt After-Tax Cost of Debt (kg) Cost of Equity (ke) 12.0% 0.00 0.10 4.7% 12.1 0.20 4.9 12.5 0.30 5.1 13.0 0.40 5.5 13.9 0.50 6.1 15.0 0.60 7.5 17.0 With the information given, what is the optimal amount of debt to use for funding projects? You may answer in decimal form

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