The Optimal Capital Structure Has Been Achieved When The

question 15

Multiple Choice

The optimal capital structure has been achieved when the:

• A)weight of equity is equal to the weight of debt.
• B)debt-to-equity ratio selected results in the lowest possible weighted average cost of capital.
• C)firm is totally financed with debt.
• D)debt-to-equity ratio is such that the cost of debt exceeds the cost of equity.
• E)cost of equity is maximized.

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Definitions:

Segments

Divisions or parts of a whole, often used to describe sections of organisms or structures within them.

Rates

Quantitative measures that represent a relationship between two quantities, showing how one quantity changes in relation to another.

Frequency

The frequency of a periodic event happening within a specified time interval.

Decibels

A unit of measurement for sound intensity, often used to describe the loudness of noises and sounds in the environment.