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5. MENA Co. has a constant growth rate of 7 percent. The company retains 30 percent of its earnings to fund future growth. MENA's expected
5. MENA Co. has a constant growth rate of 7 percent. The company retains 30 percent of its earnings to fund future growth. MENA's expected EPS (EPS1) and Rs for various capital structures are given below. What is the optimal capital structure for MENA? * Debt/Total Assets 20% 30 40 50 Expected EPS $2,50 3.00 E 325 3.75 4.00 R 15.0% 15.5 160 1700 18.0 O a. Debt/Total Assets = 20% O b. Debt/Total Assets = 30% O c. Debt/Total Assets = 40% O d. Debt/Total Assets = 50% e. None of the above
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