Book values for debt are likely to be much closer to their


True or False:

1. As with any management decision, the goal is to maximize the value of shareholder equity. To accomplish this with respect to the capital structure decision, management attempts to choose the capital structure with the highest cost of capital.

2. Book values for debt are likely to be much closer to their market values than are book values for equity.

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Financial Management: Book values for debt are likely to be much closer to their
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