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eBook Problem 21-05 a. Given the following, determine the firm's optimal capital structure: Cost of Equity After-Tax Cost of Debt Debt/Assets 13% 13 13 13 14 15 16 0% 10 20 30 40 50 60 6% 10 12 Round your answers for capital structure to the nearest whole number and for the cost of capital to one decimal place. % equity with a cost of capital of The optimal capital structure: % debt and OIf the firm were using O percent debt and 100 percent equity, what would that tell you about the firm's use of financial leverage? Round your answer for the cost of capital to one decimal place. ir the firm uses 0% debt financing, it would be using %. The firm could lower financal leverage. At that co bnation the cost of capital is select O | the cost of capital by substituting [-select, ) o c. What two reasons explain why debt is cheaper than equity? 1.In addtion, equity investors bear Select risk Debt is cheaper than equity because interest expense Select d. If the firm were using 30 percent debt and 70 percent equity and earned a return of 11.9 percent on an investment, would this mean that stockhoiders would receive less | than their required return of 13.0 percent? If the nrm earns 11.9% on an investment, the stockholders wil earn ( -Select.) than their required 1309. What return would stockholders receive? Round your answer to one decimal place