Based on the trade-off theory, what should the managers attempt to maximize and minimize while developing capital structure policy?Multiple choice question.Minimize the tax shield benefit of debt and maximize financial distress costs.Maximize debt and minimize equity.Maximize equity and minimize debt.Maximize the tax shield benefit of debt and minimize financial distress costs.

Factors determining the optimum capital structure include:a.Business risk and financial riskb.Market risk and liquidity riskc.Operational risk and credit riskd.Economic risk and political risk

Which of the following approaches can be adopted to arrive at optimal capital structure?A.The adjusted present value approachB.All of the optionsC.The Life cycle approachD.The relative approac

The manager of a firm should change the capital structure if and only if Blank______.Multiple choice question.it benefits managementthe value of the debt exceeds the value of the equitythe change will increase the value of the firmthe change will decrease the value of the firm

Which of these statements is true regarding corporate capital structures?Multiple choice question.The capital structure that maximizes the value of the firm provides the most benefit for its stockholders.The optimal capital structure results in a lower stock price and a higher cost of capital.The best capital structure is always the all-equity option.

Briefly discuss the term "Optimal Capital Structure".