Would like to reduce its debt ratio to optimal level

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Reference no: EM132063982

Corporation considers itself to be overly leveraged and would like to reduce its debt ratio to an optimal level. The firm believes its assets to be undervalued in the market and does not foresee acquiring new assets in the near future. Which of the following approaches to changing its capital structure is Corporation most likely to choose?

I. Market Recapitalization

II. Asset Divestiture

III. New Investment Financing

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

Corporation has a modest level of debt and expects to continue creating shareholder value with its corporate assets. The firm is not under duress and does not face any significant external pressures to change its capital structure. Which of the following approaches to changing its financing mix is Corporation most likely to choose?

I. New Investment Financing

II. Asset Divestiture

III. Earnings Distribution

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

Reference no: EM132063982

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