Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal de

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answerhappygod
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Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal de

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Terrell Trucking Company is in the process of setting its target
capital structure. The CFO 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:
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
% equity
At what debt-to-capital ratio is the company's WACC minimized?
Round your answer to two decimal places.
%
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