Question: 9. Determining the optimal capital structure Aa Understanding the optimal capital structure Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital
9. Determining the optimal capital structure Aa Understanding the optimal capital structure Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital structure. Transworld Consortium Corp. has gathered the following financial information to help with the analysis. Debt Ratio Equity Ratio EPS DPS Stock Price 30% 40% 50% 60% 70% 70% 60%, 1.67 0.45 24.56 50% .. 1.72 0.51 25.78 40% 1.78 0.57 27.75 30% 1.84 0.62 26.42 1.55 0.34 22.35 which capital structure shown in the preceding table is Transworld Consortium Corp.'s optimal capital structure? Debt ratio . 30%; equity ratio = 70% O Debt ratio = 50%; equity ratio-50% Debt ratio 60%; equity ratio-40% Debt ratio-70%; equity ratio 30% Debt ratio, 4096; equity ratio-60% Consider this case: Globex Corp. has a capital structure that consists of 30% debt and 70% equity. The firm's current beta is 1.15, but management wants to understand Glabex Corp.'s market risk without the effect of leverage. If Globex Corp. has a 35% tax rate, what is its unlevered beta? INS
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