A Nonoptimal Capital Structure May Lead to Higher Financing Costs

question 30

True/False

A nonoptimal capital structure may lead to higher financing costs.

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Definitions:

Back Taxes

Taxes that have not been paid when due.

Credit Card Debt

Debt incurred by an individual that is due to the use of credit cards, often subject to high interest rates.

Discharge

The legal term for the release or elimination of a debt, obligation, or charge, often used in bankruptcy proceedings.

Student Loans

Financial loans given to students to help pay for their education expenses, often subject to repayment with interest after graduation.