Which of the following statements best describes optimal capital structure?
A) As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS.
B) The optimal capital structure simultaneously maximizes EPS and minimizes the WACC.
C) The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC.
D) The optimal capital structure simultaneously maximizes common share price and minimizes the WACC.
Correct Answer:
Verified
Q22: If debt financing is used,which of the
Q32: Which of the following statements best describes
Q37: An increase in the debt ratio will
Q38: Which of the following statements best describes
Q40: Business risk is affected by a firm's
Q42: What is the major contribution of the
Q44: The firm's target capital structure should be
Q46: Which of the following statements is correct,
Q49: In a perfect world of no taxes,what
Q60: With corporate taxes but no personal taxes,and
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents