Your boss, whose background is in financial planning, is concerned about the company’s high weighted average cost of capital (WACC) of 26%. He has asked you to determine what combination of debt-equity financing would lower the company’s WACC to 14%. If the cost of the company’s equity capital is 6% and the cost of debt financing is 30%, what debt-equity mix would you recommend?
The debt-equity mix should be _______%.