The trade-off theory of capital structure implies that:
A) companies increase the amount of debt to achieve an optimal capital structure.
B) companies move toward an optimal capital structure whether debt is increased or decreased.
C) companies decrease the amount of debt to achieve an optimal capital structure.
D) companies decrease the amount of debt in their capital structure in response to legislation that will decrease liquidation costs.
Correct Answer:
Verified
Q2: Non-debt tax shields can be best defined
Q3: Mehrotra,Mikkelson and Partch (2003)found that:
A)higher leverage is
Q4: Graham (1996)found that changes in long-term debt
Q5: Similarities in capital structure can be expected
Q6: Which of the following statements is consistent
Q8: Studies that seek to provide evidence of
Q9: Which of the following statements is consistent
Q10: Evidence suggests that the introduction of the
Q11: In a survey on managers' perceptions of
Q12: A company may raise funds at a
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