The document compares Target and Costco's capital structures, costs of debt and equity financing, weighted average cost of capital (WACC), and how adjusting capital structure could impact these figures. Key findings include: - Target's WACC is 4.84% while Costco's is lower at 4.06% - Both companies could lower their WACC by over 1% by optimizing their capital structure - This could increase Target's firm value by $74.5M and Costco's by $80.6M - While debt is cheaper, more debt may create unnecessary risk that is discussed further in the document.