The Optimal Capital Structure Has Been Achieved When The

Multiple Choice

The optimal capital structure has been achieved when the:

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