Optimal Capital Structure Is

question 125

Multiple Choice

Optimal capital structure is

• A) the mix of permanent sources of funds used by the firm in a manner that will maximize the company's common stock price.
• B) the mix of all items that appear on the right-hand side of the company's balance sheet.
• C) the mix of funds that will minimize the firm's cost of equity capital.
• D) the mix of funds that will maximize the firm's interest tax shield.

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Definitions:

Virtue

A trait or quality deemed to be morally good and thus is valued as a foundation of good moral being.

Admirable Character

Qualities or traits in a person that are considered morally good and worthy of respect.

Conscience

A source of knowledge that provides us with knowledge about what is right and wrong.

Emotional Component

The part of any situation or experience that involves the psychological and physiological response to emotions, influencing behavior and decision-making.