Managers Should Not Change the Capital Structure Unless It Departs

question 94

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)change incentives of stakeholders.
• C)incur transactions costs.
• D)increase fixed costs.

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Definitions:

Perspective-Taking Levels

The cognitive ability to consider the world from another individual's viewpoint, differing in complexity and depth across development stages.

Robert Selman

A psychologist known for his work in the development of social understanding in children.

Larger Social Group

A group that consists of many members, allowing for more complex social interactions and dynamics than smaller groups.

Child

A young human being below the age of puberty or below the legal age of majority.