(d) Briefly discuss the term optimal capital structure. Does your company have the optimal Debt/equity ratio?

(d) Briefly discuss the term "optimal capital structure". Does your company have the optimal Debt/equity ratio? Justify your answer.

You can use the average of your firm's industry average ratios as "optimal capital structure".

You can also calculate business risk of your allocate company (standard deviation of EBIT/Total assets for 5 year period) as well as other firms in your firm's industry.

                                                     long term debt/equity

                               2012                   2013             2014                    2015                2016             Average 2012-2016

my firm's            0.669755253     0.540001421     0.41900889      0.816918297     0.614318007     0.610778899

industry average 0.530270951    0.391278913     0.394215845   0.353683456      0.370710793    0.367414226

                                                   EBIT/total assets 

                               2012                  2013             2014               2015                            2016             Standard Deviation of (EBIT/Total Assets) 2012-2016

my firm's         0.104452379       0.09 8937774    0.097189988    0.047508956          0.074236554              0.023670932

industry average 0.140664052  0.11017931      0.100599459       0.141116646        0.092501678               0.099901754