Which of the Following Statements Is True Ofthe Optimal Capital

question 43

Multiple Choice

Which of the following statements is true ofthe optimal capital structure?

• A) It is found by determining the debt-equity mix that maximizes expected EPS.
• B) It simultaneously maximizes EPS and minimizes the WACC.
• C) It minimizes the cost of equity, which is a necessary condition for maximizing the stock price.
• D) It simultaneously minimizes the cost of debt, the cost of equity, and the WACC.
• E) It should have the combination of debt and equity thatwill maximize the price of the firm's stock.

---

Definitions:

Isomerases

Enzymes that catalyze the rearrangement of atoms within a molecule, often crucial in metabolic pathways.

Isomeric Form

Variants of a molecule that have the same molecular formula but differ in the arrangement of atoms within the molecule or in their spatial orientation.

Enzyme

Biological molecules that significantly speed up the rate of virtually all the chemical reactions within cells.

Molecule

The smallest unit of a chemical compound that can exist; composed of two or more atoms held together by covalent bonds.