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A firm is trying to determine its optimal capital structure, the company's CFO beliefs that the optimal debt ratio is between 20% to 50% .Her staff has compiled the following projection of company 's EPS and stock price for different debt levels

Debt ratio Eps Po
20% 3.2 35
30 3.45 36.5
40 3.75 36.25
50 3.5 35.5
What is optimal capital structure?

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