A Firm Sets a Target Capital Structure to Use When

question 60

Multiple Choice

A firm sets a target capital structure to use when raising new funds in an effort to:

• A)maximize its earnings per share (EPS).
• B)minimize its cost of debt (rd).
• C)maximize the dividend per share it pays commons stockholders.
• D)minimize its cost of equity (rs).
• E)minimize its weighted average cost of capital (WACC).

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Definitions:

Providing Services

Refers to the act of performing tasks or duties for others, usually in exchange for compensation.

Managing Partner

A member of a partnership who has the authority and responsibility for the management and operation of the business.

Articles Of Organization

The document filed with a state authority to legally establish a limited liability company (LLC).

Business Run

An operation or series of operations involving the production, distribution, and sale of goods or services by a business.