Investor sentiment on Apple (AAPL) has been down these past couple months, but one of the great positives of the company resides in its great flexibility with respect to its capital structure. At this point in time, AAPL is comprised of approximately 87% equity and 13% debt. Based on my own research, I believe the company’s capital structure would best be optimized at about a 65/35 equity/debt split.The company’s cost of debt remains exceptionally cheap. Central bank overnight rates are cheap and project to be so throughout the remainder of 2016 and into 2017. There are three main options when it comes to capital structure optimization – share buybacks, debt redemption, or further capital issuance. Shareholders have normally called for buybacks in AAPL’s case due to its substantial cash balance. But this largely depends on management’s beliefs regarding where shares should trade. If they don’t believe shares are undervalued to some degree, it’s not a recommended strategy. Debt redemption only makes sense in the case of a currently over-leveraged capital structure, of which the company clearly does not have.AAPL’s capital structure is under-leveraged to the point where I estimate they could issue up to $190 billion worth of debt before the issuance would begin hurting the company’s credit rating to the point where further issuance would no longer be worth it. Going to a 70/30 or 65/35 E/D capital structure split would up to 7% accretive to share price by effectively lowering the company’s cost of capital. The company’s coverage ratio (EBIT / interest expense) would go from north of 20 into the 7.4-9.5 range, and keep the company’s credit rating in the A/AA range. The company's WACC would be minimized right around 10%. (I don't have axes on the graph, but the vertical axis corresponds to the WACC/cost of capital while the horizontal axis corresponds to the debt-to-equity ratio.)