Question: The optimal capital structure has been achieved when the: 1 . Weight of equity to the weight of debt 2 . Cost of equity is

The optimal capital structure has been achieved when the:
1. Weight of equity to the weight of debt
2. Cost of equity is maximized given a pretax cost of debt
3. Debt-equity ratio results in the lowest possible weighted average cost of capital
4. Debt-equity ratio is equal to 1
5. Debt-equity is such that the cost of debt exceeds the cost of equity

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