Which of the following statements about the trade-off, Ask an Expert

Management Studies

Which of the following statements about the trade-off theory of capital structure is most correct?

1) The trade-off theory can be used to set a precise optimal structure for any given business.

2) The trade-off theory tells us that businesses should use almost 100 percent debt financing.

3) The trade-off theory tells us that businesses should use almost no debt financing.

4) The trade-off theory tells us that businesses should use some debt financing but not too much.

5) The trade-off theory has no applicability to not-for-profit businesses.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92030519

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