gnment: Chapter 13 Homework nment Score: 35.60% ail Instructor e Exit Submit Assignment for Grading tions Problem 13.02 Question 5 of 11 Check My Work (3 remaining) Click here to read the eBook: Determining the Optimal Capital Structure OPTIMAL CAPITAL STRUCTURE Terrell Trucking Company is in the process of setting its target capital structure. The CFO O believes that the optimal debt-to-capital ratio is somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels Debt/Capital Ratio Projected EPS Projected Stock Price 20% 30 40 50 $3.10 3.50 3.75 3.55 $34.25 36.50 38.00 33.25 Assuming that the firm uses only debt and common equity, what is Terrell's optimal capital structure? Round your answers to two decimal places % debt 90 equity At what debt-to-capital ratio is the company's WACC minimized? Round your answer to two decimal places Check My Work (3 remaining) Icon Kev