Understanding the optimal capital structure Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital structure. Transworld Consortium Corp. has gathered the following financial information to help with the analysis Debt Ratio Equity Ratio EPS DPS Stock Price 30% 40% 50% 60% 70% 70% 60% 50% 40% 30% 1.25 0.55 36.25 1.40 0.60 37.75 1.60 0.65 39.50 1.85 0.75 38.75 1.75 0.70 38.25 Which capital structure shown in the preceding table is Transworld Consortium Corp.'s optimal capital structure? Debt ratio = 50%; equity ratio = 50% Debt ratio = 40%; equity ratio = 60% Debt ratio = 30%; equity ratio = 70% Debt ratio = 70%; equity ratio = 30% Debt ratio = 60%; equity ratio = 40% Consider this case