The Capital Structure That Maximizes the Value of a Company

question 33

Multiple Choice

The capital structure that maximizes the value of a company also:

• A) minimizes financial distress costs.
• B) minimizes the cost of capital.
• C) maximizes the present value of the tax shield on debt.
• D) maximizes the value of the debt.
• E) maximizes the present value of the bankruptcy costs.

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Definitions:

Federal Election Commission

An independent regulatory agency of the United States charged with enforcing campaign finance law in federal elections to ensure the integrity of the democratic process.

Slate of Electors

A group of individuals chosen in each state who are responsible for formally casting votes for the president and vice president in a U.S. presidential election.

Plurality of Votes

A voting outcome in which the candidate or proposition with the most votes wins, but does not necessarily receive an absolute majority of all votes.

Majority of Votes

More than half of the votes cast in an election or other decision-making process.