General Guidelines for Managers Regarding Capital Structure Include All of the Following

question 54

Multiple Choice

General guidelines for managers regarding capital structure include all of the following except; ​

• A)A firm with healthy profits and very little debt should not borrow more money​
• B)For most businesses, the optimal capital structure is between 30% and 50% debt ​
• C)Debt levels above 60% create excessive risk and should be avoided
• D)All of the above are correct ​

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Definitions:

Aggregate Supply Curve

A graphical representation showing the total supply of goods and services that firms in an economy are willing and able to produce at different price levels.

Maximum Output Level

The highest quantity of goods or services an economy or enterprise can produce using its current resources and technology.

Cyclical Unemployment

When people are out of work because the economy is operating below the full-employment level. It rises sharply during recessions.

Classical Economists

Economists from the late 18th and early 19th centuries who focused on the development of concepts like supply and demand, and the invisible hand theory.