A financial manager makes a choice of the amount and source of capital based on how the choice will impact:
A)debt-equity ratio.
B)earnings per share.
C)debt value.
D)firm value.

Question

Quizplus · Accepted Answer

The financial manager should make choices that increase the firm value, as this is the ultimate goal of any capital raising decision. Choices that improve the firm's creditworthiness, profitability, and long-term growth prospects are likely to increase firm value.

A Financial Manager Makes a Choice of the Amount and Source