The Concept of Soft Numbers Reflects the Fact That

question 59

Multiple Choice

The concept of soft numbers reflects the fact that

• A) financial statement numbers may be manipulated.
• B) sometimes significant measurement uncertainty exists.
• C) sometimes significant errors exist.
• D) earnings numbers may not be sustainable.

---

Definitions:

Optimal Capital Structure

The most favorable mix of debt and equity financing that minimizes the cost of capital and maximizes the value of the firm.