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.

---

Definitions:

Formal Operational

Formal operational is a stage in Piaget's theory of cognitive development where individuals gain the ability to think abstractly, logically, and systematically, typically developing during adolescence.

Postoperational

A stage in Jean Piaget's theory of cognitive development where children ages 7 to 11 start to use logic and operational thinking but are not yet able to handle abstract reasoning.

Systematically

Carried out using stepwise methods or systems, indicating an approach that is methodical and organized.

Egocentric

Characterized by an inability to distinguish between one's own perspective and someone else's perspective.