OPTIMAL CAPITAL STRUCTURE Jackson Trucking Company is the process of setting its target capital structure. The CFO belives that the optimal debt to capital ratio is somewhere between 20% and 50% and...

OPTIMAL CAPITAL STRUCTURE

Jackson Trucking Company is the process of setting its target capital structure. The CFO belives that the optimal debt to capital ratio is somewhere between 20% and 50% and her staff has compiled the following projections for EPS and the stock price at various debt levels:

Assuming that the firm uses only debt and common equity, what is Jackson's Optimal Capital structure? At what debt-to-capital ratio is the company's WACC Minimized?