Not All Firms Have the Same Optimal Capital Structure

question 51

Multiple Choice

Not all firms have the same optimal capital structure. Factors that might influence a firm's capital structure include:

• A) the industry in which it operates.
• B) the volatility of its sales and operating income.
• C) the collateral value of its assets.
• D) all of the above

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Definitions:

Admission Fee

A charge for entry, often used in the context of events, clubs, or institutions.

Capital Balance

The amount of money in a firm's capital account, reflecting the owner's initial investment plus retained earnings.

Profits and Losses

A financial statement that shows the revenue, costs, and expenses over a certain period, determining the company's net income or loss.

Admitted

In insurance, relates to insurers that are officially authorized to do business in a particular state.