Managers Should Not Change the Capital Structure Unless It Departs

question 106

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.
• E)favour shareholders over debt holders.

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Definitions:

Scientific Explanation

entails a logical and methodical elucidation based on empirical evidence and scientific methods to clarify phenomena or facts.

Aromatherapy

the practice of using essential oils and other aromatic plant compounds to enhance psychological and physical well-being.

Compress

To press together or to reduce in size or volume by applying pressure.

Wound Care

Medical management and treatment of wounds, involving cleaning, disinfection, and promoting healing processes.