Optimal capital structure


Which of the given statements best explains the optimal capital structure?

a. The optimal capital structure is the mixture of debt, equity and preferred stock which maximizes the company's earnings per share (EPS).

b. The optimal capital structure is the mixture of debt, equity and preferred stock which maximizes the company's stock price.

c. The optimal capital structure is the mixture of debt, equity and preferred stock which minimizes the company's cost of equity.

d. The optimal capital structure is the mixture of debt, equity and preferred stock which minimizes the company's cost of debt.

e. The optimal capital structure is the mixture of debt, equity and preferred stock which minimizes the company's cost of preferred stock.

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Finance Basics: Optimal capital structure
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