The Optimal Capital Structure Is Met When

question 40

Multiple Choice

The optimal capital structure is met when:

• A)additional borrowing results in lower financial distress costs.
• B)additional borrowing is offset by the interest tax shield.
• C)the tax savings from additional leverage is just offset by the costs of distress.
• D)the present value of the tax shield is greater than the value of an all-equity financed firm.

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Definitions:

SLC 500

A series of small programmable logic controllers (PLCs) manufactured by Allen-Bradley designed for small to mid-size automation projects.

Accumulated Value

In computing and data processing, this term refers to a total that increases over time as more data or units are added.

Preset Value

A predefined or user-set value that determines when a certain action should be taken or when a specific condition is met within a system.

Timed Contact

"A normally open and/or normally closed contact that is actuated at the end of a timer’s time-delay period."