Following three problems

Current Total assets $$3,000,000,000$ Tax rate $25\%$

Operating income $($EBIT$)$ $$8,000,000,000$ Debt ratio $0\%$

Interest expense $$0$ WACC $10\%$

Net income $$480,000,000$ M$/$B ratio $1\mathrm{.}00\backslash$times

Share price $$32\mathrm{.}00$ EPS $$3\mathrm{.}20$

Estimated growth rate $0\%$

Dividend payout ratio $100\%$

After going through extensive analysis, the company has decided to target $30\%$ debt and $70\%$ equity based on market values. This strategy is expected to increase the cost of equity to $13\%,$ assuming the pre$-$tax cost of debt $7\%.$

Do you agree with this target capital structure strategy as a more optimal capital structure?

Group of answer choices

Yes, the target strategy is more optimal.

No$,$ the target strategy is more optimal.