Directions: Choose the correct option for the given question:The optimum capital structure is obtained when the market value per equity share is the maximum.

 The objective of a firm is to maximize the value of its business.This is done by maximizing market value of the shares and minimizing the cost of capital of a firm. An optimal capital structure is that proportion of debt and equity, which fulfils this objective of a firm. Thus an optimal capital structure tries to optimize two variables at the same time: cost of capital and market value of shares.