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:

Margin Call

A requirement from a broker for an investor to add more cash or securities in their account to mitigate potential losses.

Electronic Markets

Trading platforms that operate over computer networks where transactions are completed electronically rather than through physical exchanges.

Direct Search

A method of job hunting or problem solving that involves approaching potential employers or solutions directly rather than through intermediaries.

Dealers

Financial intermediaries that buy and sell securities from their own inventory, acting as principal in the transaction.