Which of the Following Supports the Trade-Off Theory of Capital

question 46

Multiple Choice

Which of the following supports the trade-off theory of capital structure?

• A) Companies use cash on hand first, since issuing equity and debt is expensive.
• B) A company's capital structure is the result of past equity and debt issuance decisions.
• C) Companies have a target capital structure.
• D) a and b.

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Definitions:

Rounded

Pertaining to shapes or objects that have smooth curves or surfaces without sharp angles or edges.

Flattened

Made flat or flatter; lacking volume or prominence.

Crista Ampullaris

A sensory structure within the semicircular canals of the inner ear that detects head movements, aiding in balance and spatial orientation.

Otolithic Membrane

A structure found in the vestibular system, responsible for sensing changes in linear acceleration and head position.