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    Financial Management Principles and Applications Study Set 2
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    Exam 15: Capital Structure Policy
  5. Question
    With Taxes, but in the Absence of Financial Distress Costs
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With Taxes, but in the Absence of Financial Distress Costs

Question 46

Question 46

Multiple Choice

With taxes, but in the absence of financial distress costs, the optimal capital structure would be


A) 100% equity.
B) 50% debt, 50% equity.
C) 100% debt.
D) completely insensitive to the mix of debt and equity.

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