Which of the following statements is CORRECT?
A) As a rule,the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS.
B) The optimal capital structure simultaneously maximizes EPS and minimizes the WACC.
C) The optimal capital structure minimizes the cost of equity,which is a necessary condition for maximizing the stock price.
D) The optimal capital structure simultaneously minimizes the cost of debt,the cost of equity,and the WACC.
E) The optimal capital structure simultaneously maximizes the stock price and minimizes the WACC.

Question

Quizplus · Accepted Answer

The optimal capital structure is one that balances debt and equity in a way that maximizes the company's stock price while minimizing the weighted average cost of capital (WACC). This balance is crucial for achieving financial efficiency and enhancing shareholder value.

Which of the Following Statements Is CORRECT