The optimal debt-to-capital ratio is between 20% and 50%. Debt/capital ratio pro

Question

The optimal debt-to-capital ratio is between 20% and 50%.

Debt/capital ratio     projected EPS            Projected Stock price

20%                            $3.20                                $35.00

30                                 3.45                                   36.50

40                                 3.75                                   36.25

50                                 3.50                                  35.50

Assuming that the firm uses only debt and common equity, what is Jackson's optimal capital structure? At what debt to capital ratio is the company's WACC minimized?

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