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The optimal capital structure has been achieved when the: aDebt-equity ratio selected results in the lowest possible weighed average cost of capital. bDebt-equity ratio is

The optimal capital structure has been achieved when the:

aDebt-equity ratio selected results in the lowest possible weighed average cost of capital.

bDebt-equity ratio is such that the cost of debt exceeds the cost of equity.

cCost of equity is maximized given a after-tax cost of debt.

dMarket value weight of equity is equal to the market value weight of debt.

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