A utility company is thought to be permitted to charge prices high enough to cover all costs, comprising its cost of capital. Public service commissions are supposed to take actions to stimulate companies to operate as efficiently as possible to keep costs, therefore prices, as low as possible. Some time ago, AT & T's debt ratio was about 33 percent. Some people (Myron J. Gordon in particular) argued that higher debt ratio would lower At & T's cost capital and allow it to charge lower rates for telephone service. Gordon thought the optimal debt ratio for AT & T's was about 50 percent. Do theories support or refute Gordon's position?