问题如下:
The current weighted average cost of capital (WACC) for Van der Welde is 10 percent. The company announced a debt offering that raises the WACC to 13 percent. The most likely conclusion is that for Van der Welde:
选项:
A.the company’s prospects are improving.
B.equity financing is cheaper than debt financing.
C.the company’s debt/equity ratio has moved beyond the optimal range.
解释:
C is correct.
If the company’s WACC increases as a result of taking on additional debt, the company has moved beyond the optimal capital range. The costs of financial distress may outweigh any tax benefits to the use of debt.
不明白题目中说的beyong optimal range 是什么意思