Based on the information below, what is Ezzel Enterprises' optimal capital structure?
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.

Question

Quizplus · Accepted Answer

The optimal capital structure is typically the one that maximizes the company's stock price. In this case, option C has the highest stock price at $31.20.

Based on the Information Below, What Is Ezzel Enterprises' Optimal