Which statement best describes the capital structure decision process for a firm?

Question

Quizplus · Accepted Answer

The capital structure decision process for a firm involves finding the mix of debt and equity that will maximize firm value. This process considers factors such as the cost of debt and equity, the risk associated with each form of financing, and the impact on the firm's overall financial flexibility. The goal is to find the optimal mix of debt and equity that will minimize the cost of capital while maximizing the value of the firm.

Which Statement Best Describes the Capital Structure Decision Process for a Firm