Managers Should Not Change the Capital Structure Unless It Departs

question 87

Multiple Choice

Managers should not change the capital structure unless it departs significantly from the optimal level because such a change would ________.

• A) reduce dividends
• B) incur transactions costs
• C) increase fixed costs
• D) change incentives of stakeholders

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Definitions:

Psychoactive Substance

A chemical substance that changes brain function and leads to alterations in perception, mood, consciousness, or behavior.

Increased Use

A situation where there is a growing reliance on or consumption of a particular substance or technology.

Andropause

A term sometimes used to describe age-related changes in male hormone levels, particularly testosterone, paralleling menopause in females.

Male Menopause

A term used to describe a condition in middle-aged men that may mimic the symptoms of menopause, including changes in mood and libido, due to a gradual decline in testosterone levels.