When a Firm Alters Its Capital Structure to Include More

question 18

Multiple Choice

When a firm alters its capital structure to include more or less debt (and, in turn, less or more equity) , it impacts which of the following?

• A) the residual cash flows available for stockholders
• B) the number of shares of stock outstanding
• C) the earnings per share (EPS)
• D) all of these choices are correct.

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Definitions:

Parasitic Infestation

The state of being invaded or inhabited by parasites, which rely on their host for sustenance while contributing nothing and often causing harm.

Eosinophils

A type of white blood cell that is involved in the body’s immune response, particularly known for its role in fighting off parasitic infections and participating in allergic reactions.

Plasma

The liquid component of blood, free from cells, consisting of water, salts, hormones, and proteins, critical for transporting nutrients, hormones, and proteins throughout the body.

Dissolved Gases

Gases that are mixed into a liquid, such as oxygen or carbon dioxide in water.