Which of the Following Statements BEST Describes the Optimal Capital

question 4

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.

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Definitions:

Generations

Generations are groups of people born and living around the same time, known for having shared experiences that shape their worldview.

Authoritative

Characterized by or showing a commanding, self-confident force or an ability to give instructions or directions.

Firm Controls

Strict rules or guidelines implemented to regulate behavior or operations within an organization or system.

Responsive

Being quick to react or respond appropriately to changes or stimuli.