Benchmarking the company's capital structure is popular because it is impossible to know exactly what the company's optimal capital structure should be.

Question

Quizplus · Accepted Answer

Benchmarking the company's capital structure against similar companies in the industry can provide insight into what has been successful for others and may help identify opportunities for optimization in the future. However, due to the constantly changing financial environment and individual company circumstances, there is no one-size-fits-all solution for determining the optimal capital structure. Therefore, benchmarking remains a popular approach for guidance and reference.

Benchmarking the Company's Capital Structure Is Popular Because It Is