If a firm's optimal capital structure is 45 percent debt financing, then the firm may borrow $55 for every $45 of equity financing.

Name: If a firm's optimal capital structure is 45 percent debt financing, then the firm may borrow $55 for every $45 of equity financing.
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The statement is incorrect. If the optimal capital structure is 45% debt financing, it means that the firm should have $45 of debt for every $55 of equity financing.

If a Firm's Optimal Capital Structure Is 45 Percent Debt