Question: (d) Briefly discuss the term optimal capital structure. Does your company have the optimal Debt/equity ratio? Justify your answer. You can use the average of

(d) Briefly discuss the term "optimal capital structure". Does your company have the optimal Debt/equity ratio? Justify your answer.

You can use the average of your firm's industry average ratios as "optimal capital structure".

You can also calculate business risk of your allocate company (standard deviation of EBIT/Total assets for 5 year period) as well as other firms in your firm's industry.

long term debt/equity

2012 2013 2014 2015 2016 Average 2012-2016

my firm's 0.669755253 0.540001421 0.41900889 0.816918297 0.614318007 0.610778899

industry average 0.530270951 0.391278913 0.394215845 0.353683456 0.370710793 0.367414226

EBIT/total assets

2012 2013 2014 2015 2016 Standard Deviation of (EBIT/Total Assets) 2012-2016

my firm's 0.104452379 0.09 8937774 0.097189988 0.047508956 0.074236554 0.023670932

industry average 0.140664052 0.11017931 0.100599459 0.141116646 0.092501678 0.099901754

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