G Oncore Skate company is focused on maximizing shareholder value. They would like to recapitalize and issue more debt to repurchase common stock. They are considering two alternative capital structures. Use the information provided to complete the calculations. Their current levered beta is 1.1 and their current capital structure is 10% debt and 90% equity. Their current cost of debt is 7.75%. Their effective tax rate is 25%.The yield on a 20-year Treasury bond is 2.59%. The expected return on the stock market is 8.09%. Possible alternative structures (D/E) Cost of debt (rd) 25%/75% 8.0% 35%/65% 8.5% Find the levered beta for each proposed capital structure given here. Note that the company already has debt in their capital structure, so the existing company beta is a levered beta. You first need to solve for the unlevered beta using the current bL and current capital structure. Calculate the cost of equity for each capital structure (current and two proposed) Calculate the cost of capital for each capital structure (current and two proposed) Which is the optimal capital structure (consider the current capital structure as well as the proposed structures). Why is this structure optimal (the best)?

answer; at prices that violate government price regulations;

answer the law of increasing costs;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.