Determine Garneau's optimal capital structure based on the following informal Debt EPS DPS Stock Price 20% 2.2 1.1 40.12 30% 2.4 1.2 40% 2.6 1.3 50% 2.8 1.4 Equity 80% 70% 60% 50% O a. 20% debt; 80% equity O b. 40% debt; 60% equity O c. 50% debt; 50% equity O d. 30% debt; 70% equity 41.34 40.52 39.42

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Determine Garneau's optimal capital structure based on the following information:
Debt
EPS
DPS
Stock Price
20%
2.2
1.1
40.12
30%
2.4
40%
2.6
50%
2.8
Equity
80%
70%
60%
50%
O a. 20% debt; 80% equity
O b. 40% debt; 60% equity
O c. 50% debt; 50% equity
O d. 30% debt; 70% equity
1.2
1.3
1.4
41.34
40.52
39.42
Transcribed Image Text:Determine Garneau's optimal capital structure based on the following information: Debt EPS DPS Stock Price 20% 2.2 1.1 40.12 30% 2.4 40% 2.6 50% 2.8 Equity 80% 70% 60% 50% O a. 20% debt; 80% equity O b. 40% debt; 60% equity O c. 50% debt; 50% equity O d. 30% debt; 70% equity 1.2 1.3 1.4 41.34 40.52 39.42
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