Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A)As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS.
• B)The optimal capital structure simultaneously maximizes EPS and minimizes the WACC.
• C)The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price.
• D)The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC.
• E)The optimal capital structure simultaneously maximizes stock price and minimizes the WACC.

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Definitions:

Paramedical Expense Coverage

Insurance coverage that pays for medical services outside of traditional hospital care, such as physiotherapy, acupuncture, and massage therapy.

Indirect Compensation

Compensation that is not paid directly as cash to an employee but instead provides value in other forms such as insurance, stock options, or retirement plans.

Successful Recruitment

The process of effectively identifying, attracting, and hiring the best candidates for a job.

Labour Unrest

Discontent or conflict within the workforce usually due to poor working conditions, low pay, or lack of rights.