A firm’s optimal capital structure report depends on its balance sheet’s debt an
A firm’s optimal capital structure report depends on its balance sheet’s debt and equity mix.
A firm’s cost of capital is based on the rates of its sources of capital. Propose the optimal capital structure for both firms (AT&T vs Verizon), and calculate the mathematical effect of the proposal on the weighted average cost of capital (WAAC). Complete the following:
– Calculate the cost of equity, the cost of preferred stock, and the cost of debt for the two firms chosen.(AT&T vs Verizon)
– Compute the weighted average cost of capital for each firm.(AT&T vs Verizon)
– Evaluate whether the rates calculated are too high or too low based on the financial statements.
– Determine if the firm is operating at an optimal capital structure.
Deliverable Requirements: Your capital structure PowerPoint presentation must be at least 15 slides in length. Be sure to cite sources using APA properly; include references and in-text citations.