When a firm has a target capital structure, it is usually in a book-value term rather than a market-value term as presumed by capital structure theories or finance textbooks. In large part, this is because it is a book-value debt ratio that bankers, creditors and rating agencies pay attention to and even put in their loan covenants. The objective of this paper is to provide a systematic and practical method to determine the optimal corporate book-value debt ratio. The proposed method balances both the tax benefit of debt and its associated bankruptcy cost and more importantly incorporate the aims to maintain a good credit rating, financial robustness in times of adverse shocks and financial flexibility to seize good investment opportunities. The method could be applied by corporate finance managers to approximate the optimal book-value debt ratio to maximize a firm value.