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Additional debt should be used in the firm’s capital structure if it increases:

A)

the value of the firm.

B)

firm earnings.

C)

earnings per share.




The key to finding the optimal capital structure is identifying the level of debt that will maximize firm value. Earnings and earnings per share are not critical in and of themselves when assessing firm value, because they do not consider risk.

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上一主题:Reading 28: Capital Structure and Leverage-LOS b 习题精选
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