Question: Data below is based on Corporation AAA Year 2008 2010 2012 2014 2016 Current ratio 1 1.2 1.2 1.1 1 Quick ratio .5 .6 .5

Data below is based on Corporation AAA

Year 2008 2010 2012 2014 2016

Current ratio 1 1.2 1.2 1.1 1

Quick ratio .5 .6 .5 .4 .6

EM 1 2 2.5 4 3

TIER 6 6 7 8 6

TAT 2 3 2 3 2

PM .10 .12 .11 .13 .14

Firm value $100 $150 $180 $140 $160

What it the optimal capital structure, measured by TDR?

a. .40

b. 0

c. .50

d. .60

e. 1

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