Understanding the optimal capital structure Review this situation: Universal Exports Inc. is trying to identify its optimal capital structure. Universal Exports Inc. has gathered the following financial information to help with the analysis. Which capital structure shown in the preceding table is Universal Exports Inc.'s optimal capital structure? Debt ratio =40%; equity ratio =60% Debt ratio =60%; equity ratio =40% Debt ratio =30%; equity ratio =70% Debt ratio =70%; equity ratio =30% Debt ratio =50%; equity ratio =50% Consider this case: Globo-Chem Co. has a capital structure that consists of 40% debt and 60% equity. The firm's current beta is 1.25 , but management wants to understand Globo-Chem Co.'s market risk without the effect of leverage. If Globo-Chem Co. has a 35% tax rate, what is its unlevered beta? 0.70 0.78 1.00 0.87