When Choosing a Capital Structure, the Objective of the Firm

question 228

Multiple Choice

When choosing a capital structure, the objective of the firm should be to:

• A) Choose the one that maximizes the current value of the firm's bonds.
• B) Choose the one that minimizes the value of the firm.
• C) Choose the one that minimizes the firm's WACC.
• D) Choose the one that results in the largest interest tax shield.
• E) Choose any capital structure since it is always irrelevant.

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