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:

Performance Analysis

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Profit Center

A segment or branch of a business responsible for generating its own revenue and profit.

Data Processing Department

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Tax Firm

is a company that specializes in offering tax services, including tax preparation, consultation, and filing for individuals and organizations.