Chapter 13: Problem 5 Piedmont Instruments Corporation has estimated the following costs of debt and equity capital for various fractions of debt in its capital structure. Debt Fraction Ki ke with Financial Distress Costs and Without Agency Costs ke with Financial Distress Costs and Agency Costs 0.00 -- 12.00% 12.00% 0.10 4.8% 12.05 12.05 0.30 4.9 12.10 12.20 0.40 5.0 12.20 12.60 0.45 5.2 12.40 13.40 0.5 5.7 12.80 14.80 0.6 7.0 15.00 18.00 Based on these data, determine the companys optimal capital structure