Which of the following are correct? I. Financial managers want to choose the cap

Question

Which of the following are correct?

I. Financial managers want to choose the capital structure that will maximize shareholder wealth

II. Shareholder wealth can be maximized by maximizing both the value of the firm and WACC

III. Changes in capital structure benefit stockholders if the value of the firm increases

IV. In choosing their capital structures, the most commonly stated identifying factor by CFOs is financial flexibility

a. I and II

b. I, II, and III

c. I, II, and IV

d. I, III, and IV

e. All of the above

Explanation / Answer

correct option is "D" - I ,III ,IV

Organisation shall adopt that capital structure that maximize shareholders wealth .Firm value will increase if WACC is minimized .

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