Start by reading and following these instructions:
1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.
2. Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
3. Consider the discussions and any insights gained from it.
4. Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.
Essay: Debt securities and interest rates
Module 6 introduces a number of different types of debt security instruments. Identify at least three different categories of debt instruments, and compare and contrast them in terms of risk as well as the potential for return.
The overall interest rate of debt security consists of a number of different components. Identify each of the components, describe each, and explain why they form a part of the overall interest rate profile of the security.
Summarize your findings in a two to three-page paper.
Problem: Capital Structure and the WACC
Percent Debt (%). After Tax Debt Cost (%). Cost of equity (%)
0. —– 14
15 5 18
45 9 22
67 12 25
78 16 30
Determine the WACC for each scenario
Determine the optimal mix of debt and equity.
Present your findings in a spreadsheet, and provide the rationale for your answers.