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Your firm is currently considering a financial transaction where it will issue debt and repurchase equity. The firm currently has zero debt. The effect of

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Your firm is currently considering a financial transaction where it will issue debt and repurchase equity. The firm currently has zero debt. The effect of the transaction will be add debt to the right side of the balance sheet while having no effect on the firm's assets or operations. Your CFO has prepared the worksheet below. After conferring with the firm's investment bankers, she has determined the range of potential debt levels (the weights for debt) and the associated cost of debt for each level. She has also added some relevant information like the firm's tax rate and current beta. Your task is to complete the worksheet and determine the firm's optimal debt level

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