Payback period is often used investment decision

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Reference no: EM132050655

Payback period is an often used investment decision analysis tool. It is simple and easy to calculate. However, you know this is not the best decision criterion. Why not?

According to the following information, what is the firm's optimal capital structure?

Proportion Earnings Per Weighted Average Cost of Debt Share (EPS) of Capital (WACC)

30% $2.50 13.2%

40 3.80 12.7

50 4.75 12.4

60 5.25 12.8

(answer no percentage, whole number only)

Reference no: EM132050655

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