Which of the following would not be expected to change with changes in the firm's capital structure?
A) Weighted-average cost of capital
B) Expected return on equity
C) Expected return on assets
D) Expected earnings per share

Question

Quizplus · Accepted Answer

The expected return on assets is calculated by using the cost of debt and cost of equity, which remain the same regardless of changes in the firm's capital structure. Therefore, it would not be expected to change with changes in the firm's capital structure. A, B, and D would be expected to change with changes in the capital structure.

Which of the Following Would Not Be Expected to Change