The Firm's Target Capital Structure Should Be Consistent with Which

question 54

Multiple Choice

The 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).

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Definitions:

Self-actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.

Belonging

A sense of acceptance and support within a group or environment, often leading to feelings of security and community.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow, which suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs.

Motivation

The driving force behind individuals' actions, desires, and needs, influencing how they behave and what they strive to achieve.