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Finance 300 Final Exam with Questions and Verified Answers
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---10February 20262025/2026A+
- Finance 300 Final Exam with Questions and Verified Answers 
 
A companies optimal capital structure is... ANSWER the one that leads to maximum stock price 
Debt - Equity 
0% 100% 
10% 90% 
20% 80% 
... ... 
100% 0% 
Higher the debt is the riskier it is 
 
Target capital structure is ANSWER the one that leads to minimum WACC 
 
Cost of capital equation ANSWER (WACC) Weighted average cost of capital 
WACC = WdKd(1 - t) +Ws Ks 
 
Net income ANSWER Earnings before taxes - Taxes 
(EBT - T) 
 
K =...
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