Given the conflict between risk and return, the purpose of capital structure management is to find the debt level:
A)that will always be kept below the equity level
B)where the price of company stock is maximized
C)that most adequately supports corporate goals
D)that is equal in dollar value to the equity level

Question

Quizplus · Accepted Answer

The purpose of capital structure management is to find the debt level that maximizes the company's stock price, as this reflects the optimal balance between risk and return, ultimately enhancing shareholder value.

Given the Conflict Between Risk and Return, the Purpose of Capital