Complete The Blankproportion Of Debtcost

Complete the blank

Proportion of Debt            Cost

Equity     Cost of debt              Cost of Capital             BL

0.0                                12.0%             0

                     0.10                   12.1%             4.7%

                     0.20                   12.5%               4.9%

                     0.30                   13.0%               5.1%

                     0.40                   13.9%              5.5%                          

                     0.50                   15.0%              6.1%

                     0.60                    17.0%              7.5%

Which is the optimal capital structure and why?

If the unleveraged beta of this company is 1.12, calculate the leveraged beta for each capital structure and explain why the betas behave like this. 

ABCDEF1Proportion of debt Proportion of equityCost of debt Cost of equityWACCLeveraged beta20%100.00%0%12%12.00%1.12310%90.00%4.70%12.10%11.36%1.24A20%80.00%4.90%…