The ratio of debt to equity that provides the maximum level of profits is called the

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Optimum capital structure is the ratio of debt to equity that provides the maximum level of profits for a company. This ratio is determined by balancing the benefits of debt (lower cost of borrowing) with the risks of debt (increased financial risk and potential for bankruptcy). By finding the optimum capital structure, a company can minimize its cost of capital and maximize its profitability.

The Ratio of Debt to Equity That Provides the Maximum