Determine the capital structure

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Reference no: EM131336986

Colorado Coal Company has estimated the costs of debt and equity capital (with bankruptcy and agency costs) for various proportions of debt in its capital structure.

1823_Table 4.jpg

The company's income tax rate is 40 percent.
a. Fill in the missing entries in the table.

b. Determine the capital structure (i.e., debt ratio) that minimizes the firm's weighted average cost of capital.

Reference no: EM131336986

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