Which of the Following Statements Is CORRECT

question 68

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Absolute Income Gap

The absolute difference in income levels between individuals, groups, or countries.

Per Capita Incomes

An average amount of money earned per person in a certain area, calculated by dividing the total income of a region by its population.

U.S. Aid Programs

Initiatives provided by the United States government intended to help other countries in terms of economic development, health care, infrastructure, and education.

Growth Obstacle

Factors or conditions that hinder the economic growth and development of a country or region, such as poor infrastructure or political instability.