The optimal capital structure has been achieved when the: multiple choice debt-equity ratio is such that the cost of debt exceeds the cost of equity. incorrect debt-equity ratio is equal to 1. cost of equity is maximized given a pretax cost of debt. weight of equity is equal to the weight of debt. present value of the financial distress costs equals the present value of the tax shield on debt.

By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology. however, the costs of producing electric autos may increase because of higher costs for inputs (e.g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i.e., learning by doing). what is the expected impact of these changes on the equilibrium price and quantity for electric autos?