Based on the Information Below,what Is the Firm's Optimal Capital

question 79

Multiple Choice

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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Definitions:

Personality Disorders

Disorders in which a person adopts a persistent, rigid, and maladaptive pattern of behavior that interferes with normal social interactions.

Maladaptive Pattern

Behavior patterns that negatively affect a person’s ability to function in daily life.

Rigid Behavior

A type of behavior characterized by an unwillingness or inability to change or adapt to new situations, ideas, or environments.

DSM

Diagnostic and Statistical Manual of Mental Disorders, a publication that categorizes and defines mental health disorders.