The optimal capital structure involves
A) maximizing the cost of all funds
B) minimizing the cost of all funds
C) using no financial leverage
D) minimizing the weighted average of the cost of funds
Correct Answer:
Verified
Q25: As a firm increases its use of
Q26: Retained earnings
A) have no cost
B) are the
Q27: The effective cost of debt is reduced
Q28: The effective cost of debt depends on
1)
Q29: Debt financing is more risky for firms
Q31: The marginal cost of capital rises
1) because
Q32: If equity is negative,
A) debt exceeds total
Q33: In order to maximize the value of
Q34: The average cost of capital is the
Q35: The cost of equity
1) is less than
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