The central issue in the study of leverage is:
A)whether leverage affects stock price.
B)whether an optimal capital structure exists that maximizes stock price.
C)whether an optimal capital structure exists that minimizes the cost of capital.
D)All of the above

Question

Quizplus · Accepted Answer

The central issue in the study of leverage encompasses all the given options: it involves understanding how leverage affects stock price, determining if there's an optimal capital structure that maximizes stock price, and identifying if an optimal capital structure can minimize the cost of capital. These aspects are interconnected and crucial in financial management and corporate finance.

The Central Issue in the Study of Leverage Is