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What is the firm optimal capital structure

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Problem 1: Based on the information below, what is the firm's optimal capital structure?

a. Debt = 80%; Equity = 20%; EPS = $4.42; Stock price = $30.40.

b. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50.

c. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $27.90.

d. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20.

e. Debt = 70%; Equity = 30%; EPS = $3.31; Stock price = $30.00.

Reference no: EM132966794

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