Which of the following statements best describes the optimal capital structure?

Question

Which of the following statements best describes the optimal capital structure? Answer The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's earnings per share (EPS). The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of equity. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of debt. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of preferred stock. Which of the following statements best describes the optimal capital structure? Which of the following statements best describes the optimal capital structure? The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's earnings per share (EPS). The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of equity. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of debt. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of preferred stock. The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's earnings per share (EPS). The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of equity. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of debt. The optimal capital structure is the mix of debt, equity, and preferred stock that minimizes the company's cost of preferred stock.

Explanation / Answer

The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company's stock price.

Reason- the aim is to maximize the market capitalization and hence stock price

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