Question: Chase Johnson: Attempt 2 Jonkin & Co. is considering an increase it's debt. The firm's current D/A is 0.35 with a WACC of 12.90%. It
Chase Johnson: Attempt 2 Jonkin & Co. is considering an increase it's debt. The firm's current D/A is 0.35 with a WACC of 12.90%. It is considering two possible new levels of debt. Option 1: Issue bonds in an amount that will result in a new D/A of 0.45 with a WACC of 11.00%. Option 2: Issue bonds in an amount that will result in a new D/A of .50 with a WACC of 11.55%. Which will be the optimal? O Do not issue any new debt. Maintain the current Capital Structure. Option 1 will result in the optimal Capital Structure among the three options provided. O Option 2 will result in the optimal Capital Structure among the three options provided
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