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31. Which of the following statements regarding the optimal capital structure is TRUE? A firm that is not operating at its optimal capital structure is
31. Which of the following statements regarding the optimal capital structure is TRUE?
A firm that is not operating at its optimal capital structure is likely to be acquired by another firm that can earn arbitrage profits by purchasing the firm at a low market price and making the necessary adjustments to its capital structure. | |
The optimal capital structure is elusive and largely irrelevant, and managers can spend their time better on other issues. | |
None of the above is a true statement |
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