Which of the Following Statements Is CORRECT

question 64

Multiple Choice

Which of the following statements is CORRECT?

• A) The capital structure that minimizes the interest rate on debt also maximizes the expected EPS.
• B) The capital structure that minimizes the required return on equity also maximizes the stock price.
• C) The capital structure that minimizes the WACC also maximizes the price per share of common stock.
• D) The capital structure that gives the firm the best credit rating also maximizes the stock price.
• E) The capital structure that maximizes expected EPS also maximizes the price per share of common stock.

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Definitions:

Variable Interval

A schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed.

Reinforcement

In behavioral psychology, it refers to a consequence that strengthens an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Meteors

Bright streaks of light in the sky produced by small dust or rock fragments entering Earth's atmosphere and burning up, often called "shooting stars."

Continuous Schedule

A reinforcement schedule in which every occurrence of a desired behavior is reinforced.