A General Rule for Managers to Follow Is to Establish

question 66

Multiple Choice

A general rule for managers to follow is to establish a firm's capital structure such that the firm's

• A)cost of equity is minimized.
• B)bondholders are fully secured.
• C)current market value is maximized.
• D)dividend payout is maximized.
• E)assets are minimized.

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Definitions:

Cash

Money in the form of notes and coins, representing immediate purchasing power and liquidity.

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.

Fed

Short for the Federal Reserve, the central banking system of the United States, which regulates the U.S. monetary and financial system.

Open Market

An economic system with no barriers to free market activities, where securities, goods, and services can be traded openly.