EPS and optimal debt ratio Williams Glassware has estimated, at various debt ratios, the expected earnings per share and the standard deviation of the earnings per share as shown in the following table. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) a. Estimate the optimal debt ratio on the basis of the relationship between earnings per share and the debt ratio. You will probably find it helpful to graph the relationship. b. Graph the relationship between the coefficient of variation and the debt ratio. Label the areas associated with business risk and financial risk. a. Estimate the optimal debt ratio on the basis of the relationship between earnings per share and the debt ratio. Maximum EPS appears to be at 60% debt ratio, with $3.92 per share earnings. (Select from the drop-down menus.) b. The coefficient of variation for a debt ratio of 0% is 0.49. (Round to two decimal places.) The coefficient of variation for a debt ratio of 20% is 0.58. (Round to two decimal places.) The coefficient of variation for a debt ratio of 40% is 0.81. (Round to two decimal places.) The coefficient of variation for a debt ratio of 60% is (Round to two decimal places.)