Question: The optimal capital structure has been achieved when the: weight of equity is equal to the weight of deb t cost of equity is maximized

The optimal capital structure has been achieved when the:

weight of equity is equal to the weight of deb

t cost of equity is maximized given a pretax cost of debt

debt-equity ratio is equal to 1

present value of the financial distress costs equals the present value of the tax shield on debt

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