According to the Following Information, What Is the Firm's Optimal

Multiple Choice

According to the following information, what is the firm's optimal capital structure?     $\begin{array}{ccc}\text { Proportion } & \text { Earnings Per } & \text { Weighted Average Cost } \\\text { of Debt } & \text { Share (EPS) } & \text { of Capital (WACC) } \\\hline 30 \% & \$ 2.50 & 13.2 \% \\40 & 3.80 & 12.7 \\50 & 4.75 & 12.4 \\60 & 5.25 & 12.8\end{array}$

A) 30%
B) 40%
C) 50%
D) 60%
E) To determine the optimal capital structure, the market value of the stock must be known.