Optimal Capital Structure Quiz
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Questions and Answers

Which industry characteristic affects the optimal structure by requiring intense capital investments?

  • Variability of the credit spread
  • Stability of EBIT
  • Variability longitudinally of the TIE Ratio
  • Magnitude of P, P, & E investment (correct)

    • Which of the following is NOT a factor affecting optimal capital structure?

  • Industry characteristics
  • Shareholders’ risk profiles
  • Relative geographical location (correct)
  • Management risk profiles

    • What is the TIE Ratio?

  • Times Interest Earned (correct)
  • Total Investment Earnings
  • Total Interest Expenses
  • Total Income Earnings

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