Determine the WACC for each scenario

Determine the optimal mix of debt and equity.

Present your findings in a spreadsheet, and provide the rationale for your answers.

Problem: Capital Structure and the WACC

 

Percent Debt (%)	After Tax Debt Cost (%)	Cost of equity (%)
0	-----	14
15	5	18
45	9	22
67	12	25
78	16	30

Answer rating: 100% (QA)

To determine the Weighted Average Cost of Capital WACC for each scenario we need to calculate the co... View the full answer