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Which of the following statements is most CORRECT? A. The optimal debt ratio will maximize the firm's stock price and minimize the firm's cost of

Which of the following statements is most CORRECT?

A.

The optimal debt ratio will maximize the firm's stock price and minimize the firm's cost of capital.

B.

A company that uses robotics (hence, has high fixed costs for machinery) will have a lower degree of operating leverage than a company that makes its units using labor (rather than machines).

C.

The optimal debt level for a firm will maximize the firm's earnings per share.

D.

The pecking order hypothesis says that the first source of funds that a firm should use is retained earnings.

E.

If a mature firm sells stock to fund a new project, it is signaling to the public that it is very optimistic about the project.

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