Which of the Following Statements Best Describes the Optimal Capital

question 69

Multiple Choice

Which of the following statements best describes the optimal capital structure?

• A) The optimal capital structure is the mix of debt,equity,and preferred stock that maximizes the company's earnings per share (EPS).
• B) The optimal capital structure is the mix of debt,equity,and preferred stock that maximizes the company's stock price.
• C) The optimal capital structure is the mix of debt,equity,and preferred stock that minimizes the company's cost of equity.
• D) The optimal capital structure is the mix of debt,equity,and preferred stock that minimizes the company's cost of debt.
• E) The optimal capital structure is the mix of debt,equity,and preferred stock that minimizes the company's cost of preferred stock.

---

Definitions:

Interdependence

A relationship between entities where each is mutually dependent on the other, often seen in ecosystems, economies, and social systems.

Collaborative Goals

Objectives that are pursued together by two or more parties, with a focus on mutual benefit and shared success.

Behaviorally Specific

An approach that focuses on concrete, observable actions rather than on abstract traits or intentions.

Retrospective Goals

Objectives set after the fact, often used to make sense of past behaviors or outcomes in a new light.