The optimal capital structure of a firm
A)will remain constant over time unless the firm makes an acquisition.
B)is unaffected by changes in the financial markets.
C)will be the same for all firms in the same industry.
D)places more emphasis on the operations than on the financing of the firm.
E)will vary over time as taxes and market conditions change.

Question

Quizplus · Accepted Answer

Optimal capital structure varies over time due to changes in tax laws, market conditions, and other factors. It is not constant and depends on the specific needs and goals of the firm.

The Optimal Capital Structure of a Firm