Answer:
False.
Explanation:
Capital structure refers to the relative proportion of equity and debt that an organization uses to finance its assets.
An optimal capital structure can be defined as the best or optimum mix of equity and debt financing which typically maximizes or boost an organization's market value and reducing its capital costs.
Generally, capital structure can be achieved through a strategic technique of minimizing weighted average cost of capital (WACC) in an organization. The capital structure of a firm will vary over time as taxes and market conditions change.
Additionally, the optimum capital structure used by a firm to maximize its market value;
1. Provides the lowest cost of capital.
2. Has the best mix of common equity, debt and preferred stock.
3. Changes over time as market and firm conditions change.
