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    The answer to Optimal capital structure

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    Based on the information below, what is the firm's optimal capital structure?

    a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50.
    b. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90.
    c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20.
    d. Debt = 80%; Equity = 20%; EPS = $3.42; Stock price = $30.40.
    e. Debt = 70%; Equity = 30%; EPS = $3.31; Stock price = $30.00.

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    https://brainmass.com/business/capital-structure-and-firm-value/answer-optimal-capital-structure-353499

    Solution Summary

    The solution explains how to determine the optimal capital structure.

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