Optimal Capital Structure "First" Criteria Suggests That Risk Should Be

question 30

Multiple Choice

Optimal capital structure "first" criteria suggests that risk should be ________ and that the best way to obtain that is with ________ levels of debt and ________ levels of equity.

• A)high; high; low
• B)low; high; low
• C)low; low; high
• D)high; low; high

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Definitions:

GAS

General Adaptation Syndrome, a three-stage process (alarm, resistance, exhaustion) that describes the physiological changes the body goes through when under stress.

Stress Reactions

The body's response to a demand or threat, encompassing physical, mental, and emotional aspects.

Elevated Lymphocyte

An increase in the number of lymphocytes, a type of white blood cell, in the bloodstream, often indicating an immune response.

Blue Mood

A colloquial term for feeling sad or depressed, often used to describe a temporary emotional state.