Optimal capital structure is
A) the funding mix that will maximize the company's common stock price.
B) the mix of all items that appear on the right-hand side of the company's balance sheet.
C) the mix of funds that will minimize the firm's beta.
D) the mix of securities that will maximize EPS.

Question

Quizplus · Accepted Answer

Optimal capital structure is defined as the funding mix that maximizes a company's stock price. This involves balancing debt and equity to achieve the lowest cost of capital, thereby increasing the value of the firm to its shareholders.

Optimal Capital Structure Is