Homework Sourse40The optimal capital structure is the mixture of debt and e
40.The optimal capital structure is the mixture of debt and equity which: I. Maximizes the value of the firm.
II. Minimizes the firm\'s weighted average cost of capital.
III. Maximizes the market price of the firm\'s bonds.
A) I only
B) III only
C) I and II only
D) I and III only
E) I, II and III
40.The optimal capital structure is the mixture of debt and equity which: I. Maximizes the value of the firm.
II. Minimizes the firm\'s weighted average cost of capital.
III. Maximizes the market price of the firm\'s bonds.
A) I only
B) III only
C) I and II only
D) I and III only
E) I, II and III
40.The optimal capital structure is the mixture of debt and equity which: I. Maximizes the value of the firm.
II. Minimizes the firm\'s weighted average cost of capital.
III. Maximizes the market price of the firm\'s bonds.
A) I only
B) III only
C) I and II only
D) I and III only
E) I, II and III
Solution
The optimal capital structure is the mixture of debt and equity which ,Maximizes the value of the firm and minimizes the firm\'s weighted average cost of capital.
Ans (C) I and II only
