NO Project 1 2 3 4 5 6 7 Risk Risk factor Very low -2.00% Low -1.00% Average 0.00% High 1.00% Very high 2.00% Very high 2.00% Very high 2.00% Expected return 7.60% 9.15% 10.10% 10.40% 10.80% 10.90% 13.00% Cost (millions) $25 S25 $25 $25 S25 S25 $25 a. $150 million b. $175 million c. $75 million d. S100 million e. $125 million 36. Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50. b. Debt - 50%; Equity = 50%, EPS = $3.05, Stock price = $28.90. c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20. d. Debt - 80%; Equity = 20%; EPS = $3.42: Stock price = $30.40. e. Debt = 70%; Equity = 30%; EPS = $3.31: Stock price = $30.00 NO Project 1 2 3 4 5 6 7 Risk Risk factor Very low -2.00% Low -1.00% Average 0.00% High 1.00% Very high 2.00% Very high 2.00% Very high 2.00% Expected return 7.60% 9.15% 10.10% 10.40% 10.80% 10.90% 13.00% Cost (millions) $25 S25 $25 $25 S25 S25 $25 a. $150 million b. $175 million c. $75 million d. S100 million e. $125 million 36. Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50. b. Debt - 50%; Equity = 50%, EPS = $3.05, Stock price = $28.90. c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20. d. Debt - 80%; Equity = 20%; EPS = $3.42: Stock price = $30.40. e. Debt = 70%; Equity = 30%; EPS = $3.31: Stock price = $30.00