The
answer to the question is highlighted in red.
Explanations are highlighted in green.
7. A firm’s optimal capital structure is the
combination of debt and equity where _______ is maximized.
a. sales
b. earnings
c. operating
costs
d. dividends.
e. None of the above is correct.
The optimal capital structure is the combination of debt and
equity where the value of the firm (stock price) is maximized.
RETURN
TO THE SAMPLE QUESTIONS