The Optimal Capital Structure Has Been Achieved When The

Multiple Choice

The optimal capital structure has been achieved when the:

A) Debt-equity ratio is equal to 1.
B) Weight of equity is equal to the weight of debt.
C) Cost of equity is maximized given a pre-tax cost of debt.
D) Debt-equity ratio is such that the cost of debt exceeds the cost of equity.
E) Debt-equity ratio selected results in the lowest possible weighed average cost of capital.