15-1 BREAK-L. costs are $3.00 per ZW. What is the company break even point that is, at W....... sales volume will its income equal its costs? OPTIMAL CAPITAL STRUCTURE Armada Transport is in the process of setting its target capital structure. The CFO believes that the optimal debt-to-capital ratio is 15-2 Chapter 15 Capital Structure and Leverage 537 somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels: Debt/Capital Ratio Projected EPS Projected Stock Price 20% 30 $3.20 3.45 3.75 3.50 $35.00 36.50 36.25 35.50 40 Assuming that the firm uses only debt and common equity, what is Armada's optimal capital structure? At what debt-to-capital ratio is the company's WACC minimized