Each answer choice illustrates the relationship among Debt/Equity, rs, rd(1T), and WACC for a specific capital structure of a firm. Which Debt/Equity combination is the optimal capital structure of this firm? (Multiple Choice)

Question options:

	Debt/Equity = 25%/75%, rs = 13.20%, rd(1T) = 5.40%, WACC = 11.25%
	Debt/Equity = 50%/50%, rs = 15.60%, rd(1T) = 8.40%, WACC = 12.00%
	Debt/Equity = 12.5%/87.5%, rs = 12.51%, rd(1T) = 4.80%, WACC = 11.55%
	Debt/Equity = 0%/100%, rs = 12.00%, rd(1T) = 0, WACC = 12.00%
	Debt/Equity = 37.5%/62.5%, rs = 14.16%, rd(1T) = 6.90%, WACC = 11.44%