The Optimal Capital Structure Is Determined by Several Factors Including

question 58

Multiple Choice

The optimal capital structure is determined by several factors including all of the following except:

• A)corporate capital gains
• B)business risk
• C)potential bankruptcy risk
• D)agency costs

---

Definitions:

Infant Industry

A new or emerging industry that may require protection and support to grow against international competition.

Trade Protection

Economic policies and measures designed to restrict international trade to protect domestic industries from foreign competition.

Foreign Competition

Economic rivalry that businesses face from producers located in other countries.

Net Loss

The amount by which total expenses exceed total revenues for a business or individual, indicating a negative financial performance.