Question

The optimal capital structure is the one where the percentages of debt, preferred stock, and common equity minimize the firm's value. true or false?

Answer 1

This is false that The optimal capital structure is the one where the percentages of debt, preferred stock, and common equity minimize the firm's value.

The best combination of debt and equity financing that increases market value while lowering a company's cost of capital is known as an optimal capital structure. One strategy for aiming for the lowest cost mix of financing is to minimize the weighted average cost of capital (WACC).

Financial management greatly benefits from having the ideal capital structure. It enables a business to efficiently raise the required capital from a variety of sources. The ratio of debt to equity in the ideal capital structure will maximize the firm's wealth. The market price per share is at its highest and the cost of capital is at its lowest with this capital structure.

To know more about optimal capital structure refer to:  brainly.com/question/15041466

#SPJ4