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:

Unlimited Liability

A situation where business owners are personally responsible for all of the company's debts, without any limit.