Which of the Following Statements Best Describes the Optimal Capital

question 42

Multiple Choice

Which of the following statements best describes the optimal capital structure? The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's ____.

• A) stock price.
• B) cost of equity.
• C) cost of debt.
• D) cost of preferred stock.
• E) earnings per share (EPS).

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Definitions:

Tuition

The fee charged for instruction, typically at an educational institution like a university or college.

Opportunity Cost

The worth of the best option given up because of a choice made.

Dollar Terms

Financial transactions or economic measurements that are denominated in the U.S. dollar currency.

Opportunity Cost

Opportunity cost is the value of the next best alternative foregone as the result of making a decision, essentially what you give up to get something else.