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Discuss about capital structure

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Reference no: EM132504621

Question 1: Which of the following statements about capital structure are correct?

Select ALL correct answers.

Option 1: Having too little debt may increase the risk of default in repayment.

Option 2: A company should always finance its business using as much debt as possible in order to optimize the capital structure.

Option 3: A company needs to consider the current economic climate when making decisions on debt and equity proportions.

Option 4: Having too much equity may dilute earnings and the value of the original investors.

Reference no: EM132504621

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