Which of the Following Statements Is Correct

question 74

Multiple Choice

Which of the following statements is correct?

• A) As a rule, the optimal capital structure is found by determining the debt-equity mix that maximises expected EPS.
• B) The optimal capital structure simultaneously maximises EPS and minimises the WACC.
• C) The optimal capital structure minimises the cost of equity, which is a necessary condition for maximising the share price.
• D) The optimal capital structure simultaneously minimises the cost of debt, the cost of equity, and the WACC.
• E) Each of the above statements is false.

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Definitions:

Inflexible

A lack of adaptability or willingness to change opinions, behaviors, or actions.

Personality Disorders

Mental disorders characterized by unhealthy patterns of thinking, functioning, and behaving.

Interpersonal Conflict

A situation where two or more people experience disagreement or discord due to differing opinions, values, or needs.

Schizotypal Personality Disorder

A mental disorder characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, transient psychosis, and often unconventional beliefs.