The Capital Structure Chosen by a Firm Doesn't Really Matter

question 55

Multiple Choice

The capital structure chosen by a firm doesn't really matter because of:

• A)taxes.
• B)the interest tax shield.
• C)the relationship between dividends and earnings per share.
• D)the effects of leverage on the cost of equity.
• E)homemade leverage.

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Definitions:

Assignment

The transfer of rights or property from one party to another, often seen in contracts or similar agreements.

Assignable

Refers to rights or property that can be transferred or made over to another party by the owner.

Antiassignment Clauses

Provisions within contracts that restrict or prohibit the transfer of contract rights to another party.

Enforceable

Able to be enforced or maintained through legal proceedings.