The capital structure that minimizes the weighted average cost of capital will also
A)maximize EPS for any given level of EBIT.
B)minimize the value of the firm.
C)minimize bankruptcy costs.
D)maximize the price per share of common stock.

Question

Quizplus · Accepted Answer

Minimizing the weighted average cost of capital (WACC) leads to maximizing the firm's value, which in turn maximizes the price per share of common stock.

The Capital Structure That Minimizes the Weighted Average Cost of Capital