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    From the information below, select the optimal capital structure for a fictitious firm...

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    From the information below, select the optimal capital structure for a fictitious firm

    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

    Looking to see what formula you use to solve this. Thanks in advance.

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    Solution Summary

    The expert selects the optimal capital structure for a fictitious firms.

    $2.19

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