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Corporate Finance

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Capital Structure Concepts

CORPFN-KSERKW

Which of the following is least likely to be correct when it comes to a company's capital structure choices?

A

Having too much debt may result in bankruptcy.

B

Issuing too much equity will dilute the ownership level of insiders.

C

Paying the coupons on the outstanding bonds is a legal obligation.

D

Shareholders may take legal action if the company does not pay a return on their investment.