INSTRUCTIONS: Choose the Word or Phrase in [ ] Which

question 157

Multiple Choice

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Putting specific target dates on your goals [will not | will] increase the likelihood of their being accomplished.

• A)for the first item
• B)for the second item
• C)if neither item will correctly complete the statement.

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Definitions:

Optimal Capital Structure

The most favorable blend of debt and equity financing that minimizes a company's cost of capital while maximizing its market value.

Stock Price

The current price at which a share of a company is traded on the stock market.

Optimal Capital Structures

The best mix of debt, equity, and other financial instruments that minimizes the cost of capital for a company while maximizing its value.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which also increases the risk of loss.