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

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.

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