Starstruck Company would like to determine its optimal capital structure. Several of its managers believe that the best method is to rely on the estimated earnings per share $($EPS$)$ of the firm because they believe that profits and stock price are closely related. The financial managers have suggested another method that uses estimated required returns to estimate the share value of the firm. The following financial data are available.

$\backslash$table$[[$Capital$,,$Estimated$],[$structure$,$Estimated,required$],[$debt ratio,EPS,return$],[0\%,1\mathrm{.}75,11\mathrm{.}40\%$