In Determining the Optimum Capital Structure, It Is Assumed That

question 64

True/False

In determining the optimum capital structure, it is assumed that the firm will raise capital in the optimum proportions every year.
The firm must constantly reevaluate its capital structure for changes, in order to allow them to change its approach in the next round of financing.

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Definitions:

Semantic Encoding

The process of converting information into meaningful concepts to be stored in memory.

Working Memory

A cognitive system that holds and manipulates information in short-term memory for reasoning and guidance of decision-making and behavior.

Maintenance Rehearsal

Using working memory processes to repeat information based on how it sounds (auditory information); provides only shallow encoding of information and less successful long-term storage.

Elaborative Rehearsal

Using working memory processes to think about how new information relates to yourself or your prior knowledge (semantic information); provides deeper encoding of information for more successful long-term storage.