Which of the Following Statements Is CORRECT

question 60

Multiple Choice

Which of the following statements is CORRECT?

• A) The capital structure that maximizes expected EPS also maximizes the price per share of common stock.
• B) The capital structure that minimizes the interest rate on debt also maximizes the expected EPS.
• C) The capital structure that minimizes the required return on equity also maximizes the stock price.
• D) The capital structure that minimizes the WACC also maximizes the price per share of common stock.
• E) The capital structure that gives the firm the best bond rating also maximizes the stock price.

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Definitions:

Innate

Qualities, abilities, or knowledge that are inborn or present naturally rather than acquired.

School

A school is an institution designed for the instruction and education of students under the direction of teachers.

Stable Organization

An organization characterized by consistency, resilience, and reliability in its operations, structure, and management, leading to sustained performance over time.

Attitude

A settled way of thinking or feeling about something, typically reflected in a person's behavior.