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Value maximization of a firm depends heavily on the financial leverage of the company. This is measured by the debt-‐to-‐equity ratio, which explains what proportions of debt and equity are being used to finance the firm's assets. By adjusting this ratio, firms can influence their stock performance. In this study, I estimate the value function for each firm and take the derivative with respect to the debt-‐to-‐equity ratio. By setting this equal to zero, I solve for the optimal debt-‐doi:10.26076/6fd1-5683 fatcat:hjmkr6fovfexjkfwtmmherpalu