Describe capital structure and determine the WACC given the above assumptions.

The capital structure is a mix of debt and equity that an organization uses to finance its operations. The goal of capital structure management is to optimize the amount of debt and equity in order to maximize returns while minimizing risk. The Weighted Average Cost of Capital (WACC) is the average cost of these two sources of financing and can be calculated by taking the proportionate amounts multiplied by their respective costs.

For example, given the above assumptions we can calculate WACC as follows:

WACC = 15% Debt x 0.2 + 25% Equity x 0.8 = 22%

This means that for every dollar invested, the company would expect to incur an average cost of 22%. It is important to note that this figure should be regularly reviewed in order to make sure it accurately reflects any changes in either debt/equity rates or proportions used in order to maintain optimal performance over time.