You are an investment banker who has a meeting today. The meeting entails a client requesting your services in determining the optimal capital structure for their firm. For the case below, describe whether you would recommend that the firm choose leverage which is less than, about the same as, or greater than the average across all firms. Explain your reasoning fully.

Your morning meeting is with the CEO of a unique biotech outfit. This firm has had a difficult past due to the high uncertainty of its ventures. Only now are they generating positive profit. In addition, the time is right to generate some high growth attractive projects and the CEO feels the market is even more optimistic than he is. On the other hand, they do indeed have some very strong human capital in the firm. Their current book value of debt is $200 million and their equity is trading at a market cap of $1 Billion and with a Market-to-Book Multiple of 5x.