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Seduak has estimated the cost of debt and equity capital for various proportions of debt in its capital structure.

% of debt after-tax cost of debt cost of equity
0% - 13.0%
10 5.4% 13.3
20 5.4 13.8
30 5.8 14.4
40 6.3 15.2
50 7.0 16.0
60 8.2 17.0

based on these estimates, determine Seduak's optimal capital structure.

 

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