This research paper aims to optimize the capital structure of a company using operations research techniques. All companies require financing for day-to-day operations and expansion. The two major sources of financing are equity finance and debt finance. Raising capital by selling shares of a company is known as equity finance whereas bank loans, bonds, securities, and overdrafts are some sources of debt finance. Now the question that arises is what is the appropriate capital structure that the company must follow to achieve maximum profit at the lowest cost. To solve this problem, our paper proposes a simple mathematical model that can be applied to various companies. Using the Simplex method of solving LPP (Big M method) we have developed a model to optimize the capital structure of a company that helps to minimize the overall cost of capital while taking into account various other factors that influence it like the risk of insolvency, tax shield, and expenses incurred to acquire the funds.