The Optimal Capital Structure Has Been Achieved When The:

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The Optimal Capital Structure Has Been Achieved When The:

-debt-equity ratio is equal to 1. -weight of equity is equal to the weight of debt. -cost of equity is maximized given a pre-tax cost of debt. -debt-equity ratio is such that the cost of debt exceeds the cost of equity. -debt-equity ratio results in the lowest possible weighted average cost of capital.
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debt-equity ratio results in the lowest possible weighted average cost of capital.

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