If a company has over capitalization, rate of earning is: Select one: a. equal with the rate of earning if it has optimal level of capitalization b. lower than the rate of earning if it has optimal level of capitalization c. higher than the rate of earning if it has optimal level of capitalization

If a company has over capitalization, rate of earning is: Select one: a. equal with the rate of earning if it has optimal level of capitalization b. lower than the rate of earning if it has optimal level of capitalization c. higher than the rate of earning if it has optimal level of capitalization

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 13QTD

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Question

If a company has over capitalization, rate of earning is: Select one:
a. equal with the rate of earning if it has optimal level of capitalization
b. lower than the rate of earning if it has optimal level of capitalization
c. higher than the rate of earning if it has optimal level of capitalization

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