The Trade-Off Theory of Capital Structure Implies That

question 38

Multiple Choice

The trade-off theory of capital structure implies that:

• A)companies increase the amount of debt to achieve an optimal capital structure.
• B)companies move toward an optimal capital structure whether debt is increased or decreased.
• C)companies decrease the amount of debt to achieve an optimal capital structure.
• D)companies decrease the amount of debt in their capital structure in response to legislation that will decrease liquidation costs.

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A graphical operating system environment developed by Microsoft, or openings in the walls of buildings covered with glass.

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