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As a General Rule, the Optimal Capital Structure Is the One

Question 2

Multiple Choice

As a general rule, the optimal capital structure is the one that:


A) maximizes both the firm's expected EPS and its stock price.
B) minimizes the interest rate on its debt and maximizes its expected earnings per share.
C) minimizes its required rate on equity and maximizes its stock price.
D) maximizes its stock price and minimizes its weighted average cost of capital.
E) minimizes its expected earnings per share and maximizes its weighted average cost of capital.

Correct Answer:

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