When selecting a capital structure,managers should aim to maximize the
A)tax deductions that are available to the company.
B)value of the firm for its managers and employees.
C)size of the firm.
D)value of the firm for its shareholders.
E)growth rate of the company.

Question

Quizplus · Accepted Answer

Managers should aim to maximize the value of the firm for its shareholders when selecting a capital structure. This ensures that the company is able to generate the highest possible returns for its investors, which is ultimately the primary goal of any business. While tax deductions and other factors may also be important considerations, the overall objective of maximizing shareholder value should remain the top priority.

When Selecting a Capital Structure,managers Should Aim to Maximize the