The Firm's Target Capital Structure Is Consistent with Which of the Following

question 142

Multiple Choice

The firm's target capital structure is consistent with which of the following?

• A) minimum risk
• B) maximum earnings per share
• C) minimum weighted average cost of capital
• D) minimum cost of equity

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.

Fixed Cost

refers to expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Cell Phones

Portable electronic devices that allow for telecommunication over a network of stations without the need for a physical connection to a telephone line.

Output Level

The output level refers to the total amount of goods or services produced by an individual, firm, or economy at a given time.