CFI.

Exams $|$ FMVA Practice Exam

$18$ out of $50$

Review

Which of the following statements about capital structure are correct? Select ALL correct answers.

Having too much equity may dilute earnings and the value of the original investors.

A company should always finance its business using as much debt as possible in order to optimize the capital structure.

A company needs to consider the current economic climate when making decisions on debt and equity proportions.

Having too little debt may increase the risk of default in repayment.