Which of the following statements best describes the optimal capital structure? a. The optimal capital structure...

Which of the following statements 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 minimizes the company's cost of preferred stock.
	c.	The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of debt.
	d.	The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of equity.
	e.	The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price.

Solutions

Expert Solution

Optimal capital structure included a combination of equity, debt and preferred stock.

An optimal structure is one which maximize the earning that is maximize earning per share.

So correct answer is part a) The optimal capital structure is a mix of debt, equity and preferred stock that maximizes the company's Earning per share (EPS)

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Which of the following statements best describes the relationship of structure to higher leadership performance? Correct...

Which of the following statements best describes the relationship of structure to higher leadership performance? Correct Answer To attain higher effectiveness, you must reach higher performance. Correct Answer To perform more masterfully, your Inner Operating System (IOS) must evolve to a higher order mental-emotional structure. Correct Answer Since performance determines structure, if you want to evolve to a higher order structure, you must reach higher performance. Correct Answer When we see extraordinary leadership, we see well-honed capability arising on a...

Which of the following statements best describes an idaas implementation

Which of the following statements best describes non-judicial foreclosure?

Which of the following statements best describes non-judicial foreclosure? When there is a "partnership" provision in the mortgage or trust deed document, a non-judicial foreclosure cannot proceed unless a circuit judge agrees with the lender. When there is a "sale requirement provision in the mortgage or trust deed document, a non-judicial foreclosure cannot proceed unless the borrower agrees. When there is a "power of sale" provision in the mortgage or trust deed document, a non-judicial foreclosure can force the sale of the lined...

Which of the following statements best describes corporate goals? a. The proper goal of the financial...

Which of the following statements best describes corporate goals? a. The proper goal of the financial manager should be to attempt to maximize the firm’s expected cash flows, because this will add the most to the wealth of the individual shareholders. b. The riskiness inherent in a firm’s earnings per share (EPS) depends on the characteristics of the projects the firm selects, and thus on the firm’s assets. However, EPS is not affected by the manner in which those assets...

Which of the following statements best describes cash flows that would be shown on a cash...

Which of the following statements best describes cash flows that would be shown on a cash budget? a. The cash flows shown on the cash budget are the actual cash inflows and outflows and thus different from the firm’s free cash flows, because FCF reflects after-tax operating income and the investments required to maintain future operations. b. Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciation); hence, depreciation is set forth on a...

Which of the following statements best describes a common resource? Select one: a. A resource that...

Which of the following statements best describes a common resource? Select one: a. A resource that we cannot stop people from using, and when it is used, its benefit available to others is reduced. b. A resource that is non-excludable but rival. c. A resource that is typically characterised by overuse. d. A resource that would not have occurred were the property rights well defined. e. All of the above

Which of the following statements best describes a common resource? Select one: a. A resource that...

1. Which of the following statements best describes the purpose of the cash flow statement? A....

1. Which of the following statements best describes the purpose of the cash flow statement? A. To explain the sources and uses of cash during the accounting period B. To determine the company’s profitability during the fiscal year C. To determine the level of debt the company must finance D. Assess the competitive risks faced by the company. 2. Which of the following statements best describes the purpose of internal controls over financial reporting? A. To reduce the likelihood that...

Which of the following statements best describes railroads’ contribution to the second half of the 1800s...

Which of the following statements best describes railroads’ contribution to the second half of the 1800s here in the United States? The railroads helped to prompt the process of national unity. People for the first time in history could travel everywhere, but such regional accessibility was only for those people who had economic resources. Of course, railroads helped to start the process of industrialization in the United States right after the Civil War. Still, such railroad companies served those leading...

1. Which of the following statements best describes a sampling distribution? Select one: a. It is...

1. Which of the following statements best describes a sampling distribution? Select one: a. It is the distribution of the values of a variable in the population from which the sample is taken b. It is the distribution of the values of a statistic that resembles the normal distribution when the sample size is large c. It is the distribution of the values of a statistic calculated from 1000 simple random samples displayed in a histogram. d. It is the...

Subjects