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

question 51

Multiple Choice

From the information below,select the optimal capital structure for Mountain High Corp.

• 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:

Electronic Funds Transfer

A system that allows the transfer of money between accounts via electronic signals, eliminating the need for physical checks.

Deposits In Transit

Funds that have been received and recorded by a business, but not yet processed or recorded by the bank.

Timing Difference

Differences between when transactions affect the book balances and bank balances, often seen in accounting reconciliations.

Credit Memo

A document issued by a seller to a buyer, reducing the amount that the buyer owes to the seller under the terms of an earlier invoice.