A Firm Has Determined Its Cost of Each Source of Capital

question 130

Multiple Choice

A firm has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and current market value proportions: Other things remaining constant, if the firm were to shift toward a capital structure with ________ the weighted average cost of capital will be higher.

• A) 45% long-term debt, 40% common stock, and 15% preferred stock
• B) 60% long-term debt, 20% common stock, and 20% preferred stock
• C) 20% long-term debt, 60% common stock, and 20% preferred stock
• D) 60% long-term debt, 30% common stock, and 10% preferred stock

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Definitions:

Sleep Deprivation

A condition resulting from not getting enough sleep, which can affect physical, mental, and emotional health.

Premature Aging

A condition where the signs of aging occur earlier than the typical age range for those signs, often due to genetic disorders, lifestyle, or environmental factors.

Emotion-Focused Coping

A stress management strategy that involves attempting to reduce negative emotional responses associated with stress, such as embarrassment, fear, anxiety, depression, excitement, and frustration.

Problem-Focused Coping

A strategy aimed at confronting and directly dealing with the causes of stress or problems in order to reduce or remove their impact.