Which of the Following Would Not Be Expected to Change

question 69

Multiple Choice

Which of the following would not be expected to change with changes in the firm's capital structure?

• A)weighted-average cost of capital.
• B)expected return on equity.
• C)expected return on assets.
• D)expected earnings per share.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential dividends.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a predetermined price within a certain period.

Vesting Period

The period of time before shares are unconditionally owned by an employee in an employee stock option plan.