A Major Factor in Determining the Optimal Capital Structure Is

question 25

Multiple Choice

A major factor in determining the optimal capital structure is:

• A) the trade-off between the interest rate costs of debt and the possible bankruptcy costs associated with equity.
• B) the trade-off between the tax advantage of debt and the possible bankruptcy costs associated with equity.
• C) the trade-off between the tax advantage of debt and the possible bankruptcy costs associated with debt.
• D) the trade-off between the interest rate costs of equity and the possible bankruptcy costs associated with equity.