Which of the Following Statements Is Most Correct

question 46

Multiple Choice

Which of the following statements is most correct?

• A) The optimal capital structure minimizes the WACC.
• B) If the after-tax cost of equity financing exceeds the after-tax cost of debt financing,firms are always able to reduce their WACC by increasing the amount of debt in their capital structure.
• C) Increasing the amount of debt in a firm's capital structure is likely to increase the cost of both debt and equity financing.
• D) Answers a and c are both correct.
• E) Answers b and c are both correct.

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Definitions:

Operational Integration

The process of aligning and coordinating an organization's operations, processes, and strategies to improve efficiency and achieve unified goals.

Omnichannel Retailing

A multi-channel approach to sales that aims to provide customers with a seamless shopping experience whether they're shopping online from a mobile device, a laptop, or in a brick-and-mortar store.

Organizational Structure

The system that outlines how certain activities are directed in order to achieve the goals of an organization, including roles, responsibilities, and authority flows.

Retail Distribution Center

A dedicated warehouse facility that centralizes the reception, processing, and distribution of goods to various retail outlets.