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The optimal capital structure is the ont that (maximizes / minimzes) the WACC and (maximizes / minimizes) the firm's stock price. Higher debt levels (increase / decrease) the firm's risk. Consequently, higher levels of debt cause the firm's cost of equity to (decrease / increase). 2. Axis Chemical Co. has found that its expected EPS is maximized at a debt ratio of 45%. Does this mean that Axis Chemical Co.'s optimal capital structure calls for 45% debt? Yes or No

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Financial Management, Finance

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