Which of the following statements best describes the optimal capital structure? The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's ____.

Question

Quizplus · Accepted Answer

The optimal capital structure is the one that maximizes the value of the company, which is reflected in its stock price. By choosing the right mix of debt, equity, and preferred stock, a company can maximize its stock price and, therefore, the wealth of its shareholders. While minimizing costs is important, the ultimate goal of the capital structure is to maximize shareholder value.

Which of the Following Statements Best Describes the Optimal Capital