Based on the Information Below, What Is Ezzel Enterprises' Optimal

question 32

Multiple Choice

Based on the information below, what is Ezzel Enterprises' 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:

Manufacturing Cost Elements

The primary components of manufacturing costs, typically including direct materials, direct labor, and manufacturing overhead.

Physical Unit Flow

A method of measuring and tracking the movement of physical units through a production process or system.

Unit Production Costs

The total cost associated with producing one unit of a product, including both direct costs like materials and labor, as well as allocated overhead.

Flow of Costs

The movement and assignment of costs through a company's production processes to its products or services.