From the Information Below,select the Optimal Capital Structure for Minnow

question 29

Multiple Choice

From the information below,select the optimal capital structure for Minnow Entertainment Company.

• 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:

Dividend Policy

A company's strategy or guidelines dictated to decide how much it will pay out to shareholders in dividends.

Trading Range

The spread between the high and low prices of a security over a given period.

Highest Price

The maximum price at which a particular security, commodity, or asset has traded over a certain period of time.

Lowest Price

The minimum price reached by a security, commodity, or market over a given time period, often used as an indicator in trading decisions.