Trade-off vs Pecking Order Capital Structure Optimization

I spent the last few weeks digesting the capital structure section in the CME-1 syllabus and found the theoretical friction between the trade-off model and the pecking order theory to be quite intense. Practically speaking, a bank manager sees the desire to lower WACC through debt, but the academic side paints a picture where the tax shield benefits are eventually outweighed by the costs of financial distress and agency problems as leverage mounts. It raises a difficult decision point for me regarding how we advise corporate clients on whether to prioritize issuing new shares or borrowing when they have retained earnings sitting on the balance sheet. If a firm is operating in a protected sector with stable cash flows, is it theoretically sound to aggressively pursue low-cost debt until the optimal capital structure is reached, or does the uncertainty of future regulatory changes in the region invalidate static capital structure theories that assume constant future cash flows? My specific inquiry centers on how we apply the cost of debt when a company has a mix of secured and low-quality unsecured bonds and we are trying to compute a specific scenario for project appraisal using internal rate of return. Since the company has a high degree of operating leverage, does the incremental risk to the firm during the payout phase of securities inherently change the cost of equity calculation through the security market line, or does the CAPM beta remain fixed regardless of whether we raise capital through external equity markets or retain our internal earnings to fund the expansion? Does anyone have a clearer explanation.