The Firm's Target Capital Structure Should Do Which of the Following

question 84

Multiple Choice

The firm's target capital structure should do which of the following?

• A) Maximize the earnings per share (EPS).
• B) Minimize the cost of debt (r_d).
• C) Obtain the highest possible bond rating.
• D) Minimize the cost of equity (r_s).
• E) Minimize the weighted average cost of capital (WACC).

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Definitions:

Rewards

Benefits or recognition given to employees for their work performance, often used as a motivational tool within organizations.

Referral Bonus

A financial reward given to an employee for recommending a candidate who is then successfully hired.

Employment Offer

A formal proposal of employment provided by an employer to a potential employee, specifying details such as position, salary, and conditions.

Carpool

An arrangement where several individuals travel together in one vehicle, especially to work or school, to save costs and reduce traffic congestion.