Determine Lendrum's optimum capital structure based on the following information:

debt equity EPS DPS Stock Price

$20\%80\%2\mathrm{.}21\mathrm{.}144\mathrm{.}12$

$30\%70\%2\mathrm{.}41\mathrm{.}246\mathrm{.}34$

$40\%60\%2\mathrm{.}61\mathrm{.}348\mathrm{.}52$

$50\%50\%2\mathrm{.}81\mathrm{.}446\mathrm{.}42$

Question $9$ Answer

a$.$

$20\%$ debt; $80\%$ equity

b$.$

$30\%$ debt; $70\%$ equity

c$.$

$40\%$ debt; $60\%$ equity

d$.$

$50\%$ debt; $50\%$ equity