The Controversy Over the Existence of an Optimal Capital Structure

Multiple Choice

The controversy over the existence of an optimal capital structure is debated between those_________who believe a traditional approach exists and those _________, who do not believe one exists. In the _________approach to capital structure, the optimal capital structure occurs where the_________is minimized.

A) traditionalists; supporters of Modigliani and Miller; traditional; cost of capital
B) traditionalists; supporters of Modigliani and Miller; traditional; degree of financial leverage
C) supporters of Modigliani and Miller; traditionalists; Modigliani and Miller; cost of capital
D) supporters of Modigliani and Miller; traditionalists; Modigliani and Miller; degree of financial leverage.