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

Question

Quizplus · Accepted Answer

The capital structure decision process involves finding the optimal mix of debt and equity that maximizes firm value. This involves considering factors such as the cost of debt and equity, the risk profile of the company, and the preferences of stakeholders such as shareholders and creditors. The goal is to find the balance that achieves the highest market value of the firm while balancing risk and reward. None of the other choices accurately describe the capital structure decision process.

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