Which of the Following Statements Best Describes the Optimal Capital

question 59

Multiple Choice

Which of the following statements best describes the optimal capital structure? The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's ____.

• A) stock price.
• B) cost of equity.
• C) cost of debt.
• D) cost of preferred stock.
• E) earnings per share (EPS).

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Definitions:

Binomial Coefficient

The number of ways to choose a fixed number of elements out of a larger set, commonly represented as "n choose k."

Expansion

The process of expressing something in an extended form, often used in mathematics to denote the development of an algebraic expression or series.

N Th Term

A term in a sequence or series that is specified by its position (n), often expressed as a formula in terms of n.

Expansion

The process of simplifying expressions by removing brackets in algebra.