A) there exists an optimal capital structure
B) no optimal capital structure
C) equal optimal capital structure
D) 100% debt financial organizations
✅ ANSWER: A
Traditional theorists believe that there exists an optimal capital structure. An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company’s market value while minimizing its cost of capital.
Traditional theorists believe that there exists an optimal capital structure. An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company’s market value while minimizing its cost of capital.