Firm's Target Capital Structure Should Be Consistent with Which of the Following

question 22

Multiple Choice

firm's target capital structure should be consistent with which of the following statements?

• A)Maximize the earnings per share (EPS).
• B)Minimize the cost of debt (rd).
• C)Obtain the highest possible bond rating.
• D)Minimize the cost of equity (rs).
• E)Minimize the weighted average cost of capital (WACC).

Calculate factory overhead rates and understand their implications on product costing.

Identify the consequences of using a plantwide factory overhead rate when there are significant differences in activities causing overhead costs across departments.

Distinguish between plantwide and multiple production department factory overhead rates in terms of accuracy and application.

Understand how the selection of factory overhead allocation method affects product cost accuracy.