Which Statement Best Describes the Optimal Capital Structure

question 37

Multiple Choice

Which statement best describes the optimal capital structure?

• A)The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's earnings per share (EPS).
• B)The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price.
• C)The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of equity.
• D)The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of debt.

Learn the shared responsibility of Medicare taxes between employer and employee.

Understand and identify contingent liabilities.

Recognize and describe the characteristics of defined contribution and benefit plans.

Understand the timing of expense recognition related to employee benefits.

---

Definitions:

Full Benefits

A comprehensive benefits package offered to employees, which may include health insurance, retirement plans, vacation days, and other perks in addition to salary.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Private Pension Plans

Are prearranged plans administered by the organization that provides income to employees at their retirement.

Perquisite

Benefits or privileges provided to employees in addition to their regular salary, often seen as perks of the job.