Figure 21-8 
-Refer to Figure 21-8. If the price of good X is $5, and your budget constraint is DE, what is the price of good Y?
Definitions:
DFL
Degree of Financial Leverage, a ratio measuring the sensitivity of a company's earnings per share to fluctuations in its operating income, due to changes in its capital structure.
Optimal Capital Structure
The most favorable blend of debt and equity financing that minimizes a company's cost of capital while maximizing its market value.
Stock Price
The current price at which a share of a company is traded on the stock market.
Optimal Capital Structures
The best mix of debt, equity, and other financial instruments that minimizes the cost of capital for a company while maximizing its value.
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