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Sunshine corporation's capital structure has a maximum capacity of 60% debt.

 Sunshine corporation's capital structure has a maximum capacity of 60% debt. Their cost of debt is 4% their cost of equity is 10% and their tax rate is 21% what percent of equity would optimize sunshine corporation's WACC,


I believe the answer is 5.89 but i am unsure. If that is incorrect how would I go about solving this problem?

Top Answer

WACC=(60%*4%)(1-0.21)+(0%)+(40%*10%)=5.896... View the full answer

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Other Answers

WACC is optimized when the debt is... View the full answer

The S Corporation will have... View the full answer

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