The financial management goal as it pertains to the capital structure of a firm is to operate at the point where the debt-equity mix:

A) Creates the largest tax shield for the firm.
B) Maximizes the financial distress costs.
C) Maximizes the value of the firm.
D) Minimizes the potential bankruptcy costs.
E) Minimizes the yield-to-maturity on debt.

Capital Structure

The mixture of debt and equity that a company uses to finance its operations and growth.

Tax Shield

The reduction in income taxes that result from taking a deductible expense, such as mortgage interest, which reduces taxable income.

Financial Distress Costs

Expenses that a company faces when it is having difficulty meeting its financial obligations, which can include legal, restructuring, and operational costs.