In 750-1,000 words, respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas. APA formatting. 3 references
â€œWe can determine the target WACC for Apix Printing Inc., given these assumptions.
- Weights of 40% debt and 60% common equity (no preferred equity)
- A 35% tax rate
- Cost of debt is 8%
- Beta of the company is 1.5
- Risk-free rate is 2%
- Return on the market is 11%
Complete the following:
- Describe capital structure.
- Determine the WACC given the above assumptions.
- Indicate how these might be useful to determine the feasibility of the capital project.
- Recommend which is more appropriate to apply to project evaluation.
- Define marginal cost of capital.