What Is the Optimal Capital Structure

question 57

Multiple Choice

What is the optimal capital structure?

• A) The capital structure that frees up the most cash flow
• B) The capital structure that makes management the most money
• C) The capital structure that produces the highest firm value
• D) The capital structure that keeps the most control within the company

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Definitions:

Marxian Inputs

Factors of production (labor, capital, etc.) as analyzed in Marxist economic theory, focusing on their exploitation and role in generating surplus value.

Production Function

A quantitative model that demonstrates how the inputs in the production process impact the goods or services output.

Supply Function

A mathematical expression that shows the relationship between the quantity of a good or service that producers are willing to sell and the price of the good or service.

Factor Price

The price of inputs used in the production of goods and services, such as labor wages or the cost of raw materials.