Determining the optimal capital structure Understanding the optimal capital structure Review this situation: Universal Exports Inc. is trying to identify its optimal capital structure. Universal Exports Inc. has gathered the following financial information to help with the analysis. Which capital structure shown in the preceding table is Universal Exports Inc.'s optimal capital structure? Debt ratio = 50%: equity ratio = 50% Debt ratio = 60%: equity ratio = 40% Debt ratio = 70%: equity ratio = 30% Debt ratio = 30%: equity ratio = 70% Debt ratio = 40%: equity ratio = 60% Consider this case: Globex Corp. has a capital structure that consists of 35% debt and 65% equity. The firm's current beta is 1.25, but management wants to understand Globex Corp.'s market risk without the effect of leverage. If Globex Corp. has a 40% tax rate, what is its unlevered beta? 0.94 0.99 0.89 0.80