B4 (Capital structure weights) The required return on debt (before taxes) is 7 5 , the required return on equity is 15 , and the cost of capital is 10 If the marginal income tax rate is 40 , what are the proportions of debt and equity financing

Question: B4. (Capital structure weights) The required return on debt (before taxes) is 7.5%, the required return on equity is 15%, and the cost of capital

B4. (Capital structure weights) The required return on debt (before taxes) is 7.5%, the required return on equity is 15%, and the is 10%. If the marginal income tax rate is 40%, what are the proportions of debt and equity financing?

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