The Use of the Optimum Capital Structure Minimizes the Cost

question 104

True/False

The use of the optimum capital structure minimizes the cost of capital.

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Definitions:

Interest Payable

A liability account representing the amount of interest expense that has been incurred but not yet paid by the company.

Current Liability

A liability that is expected to be paid off within a year's time or within the normal operating cycle of a business.

Short-Term Obligation

Debt or financial obligations due within one year.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.