Which of the Following Statements Is CORRECT

question 58

Multiple Choice

Which of the following statements is CORRECT?

• A) The optimal capital structure simultaneously maximizes EPS and minimizes the WACC.
• B) The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price.
• C) The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC.
• D) The optimal capital structure simultaneously maximizes stock price and minimizes the WACC.
• E) As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS.

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Definitions:

Stimulus to be Remembered

An item, event, or condition that is to be recalled or retained in memory.

Elaborative Rehearsal

A memory technique that involves thinking about the meaning of the term to be remembered, as opposed to merely repeating the word to yourself.

Maintenance Rehearsal

A method of keeping information in short-term memory by mentally repeating it.

Lasting Memory

A lasting memory refers to information or experiences that can be retained and recalled for a long period of time.