General Studies · Features of Ideal Capital Structure
Which of the following statements regarding the features of an ideal capital structure are CORRECT? A. Profitability: The structure should maximize the firm's EPS by borrowing at a cost lower than the return on invested capital. B. Economy: The combination of funds chosen should result in the lowest overall weighted average cost of capital. C. Control: The structure should be designed to unnecessarily dilute the voting rights and control of existing promoters. D. Capacity: The level of borrowing should be within the firm's debt-service capacity based on its cash flow position. Choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A, B and D Only✓
- 2A, C and D Only
- 3B, C and D Only
- 4A, B and C Only
Correct answer
A, B and D Only
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