The Capital Structure Chosen by a fiRm Doesn't Really Matter

question 371

Multiple Choice

The capital structure chosen by a firm doesn't really matter because of:

• A) Taxes.
• B) The interest tax shield.
• C) The relationship between dividends and earnings per share.
• D) The effects of leverage on the cost of equity.
• E) Homemade leverage.

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Definitions:

Cognitive Dissonance

The discomfort in one's mind occurring when they simultaneously hold multiple opposing beliefs, ideas, or values.

Deliberate Attempt

A planned and intentional action aimed at achieving a specific outcome.

Expertise

An extensive amount of background knowledge that is relevant to a reconstructive memory task.

Persuasion

The act or process of influencing someone's beliefs, attitudes, or behaviors through communication.