A firm would like to have an optimal capital structure. If it has lower than optimal capital structure (lower than optimal debt), it could __________. If it has a higher than optimal capital structure, it could ____________.

a. Issue more stock to pay down debt; issue more debt to repurchase shares

b. Issue more debt to repurchase shares; pay down debt with retained earnings

c. Issue more long-term debt to pay down short term debt; issue more equity

d. Use retained earnings to pay down debt; issue more debt to repurchase shares

e. Use retained earnings to repurchase shares; pay down debt with retained earnings