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 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.
E) The optimal capital structure is the mix of debt,equity,and preferred stock that minimizes the company's cost of preferred stock.

Question

Quizplus · Accepted Answer

The optimal capital structure is the one that maximizes the company's stock price by balancing the cost and benefits of debt, equity, and preferred stock, thereby maximizing shareholder value.

Which of the Following Statements Best Describes the Optimal Capital