The Optimal Capital Structure Has Been Achieved When The

question 46

Multiple Choice

The optimal capital structure has been achieved when the:

• A) debt-equity ratio is equal to 1.
• B) weight of equity is equal to the weight of debt.
• C) cost of equity is maximized given a pretax cost of debt.
• D) debt-equity ratio is such that the cost of debt exceeds the cost of equity.
• E) debt-equity ratio results in the lowest possible weighted average cost of capital.

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Definitions:

Social Anxiety Disorder

A mental health condition characterized by intense, persistent fear of being watched and judged by others in social situations.

Panic Disorder

A psychiatric disorder characterized by recurrent unexpected panic attacks—sudden periods of intense fear accompanied by physical and cognitive symptoms.

Generalized Anxiety Disorder

A mental health disorder characterized by excessive, uncontrollable worry about everyday things, impacting daily functioning.

Obsessive-compulsive-related Disorder

A category of psychological disorders characterized by recurrent, intrusive thoughts (obsessions) and repetitive behaviors (compulsions) that the individual feels driven to perform.