Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A) the capital structure that maximizes the stock price is generally the capital structure that also maximizes earnings per share.
• B) all else equal, an increase in the corporate tax rate would tend to encourage a company to increase its debt ratio.
• C) since debt financing raises the firm's financial risk, increasing a company's debt ratio will always increase its wacc.
• D) since debt is cheaper than equity, increasing a company's debt ratio will always reduce its wacc.
• E) when a company increases its debt ratio, the costs of equity and debt both increase. therefore, the wacc must also increase.

Identify the components and calculations of inventory costs, including holding, setup, and ordering costs.

Describe the role and methods of inventory control in production and service operations.

Understand the impact of demand variability on inventory management and stock level decision-making.

Explain the concept of service level and how it relates to stockouts and inventory policy.

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Definitions:

Investment Matured

An investment matured refers to when an investment reaches its due date and the principal amount is returned to the investor along with any final interest payments.

Interest Amount

The sum paid or charged for the use of money or for borrowing money.

Interest Earned

Interest Earned is the amount of interest received over a period on deposits or investments.

Invested Amount

The sum of money placed into an investment vehicle with the expectation of generating a return.