Question

Optimum Capital structure implies a ratio debt and equity at when _________ would be least and market value of the firm would be highest.

a) Marginal Cost of Capital

b) WACC

c) Cost of debt

d) Opportunity Cost​

Answer 1

Answer:

WACC

Explanation:

Do you want proof of the answer:

An optimal capital structure is the best mix of debt and equity financing that maximizes a company's market value while minimizing its cost of capital. Minimizing the weighted average cost of capital (WACC) is one way to optimize for the lowest cost mix of financing.

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