Which of the following is not a feature of an optimal capital structure?

Safety
Flexibility
Control
Solvency

The correct answer is A. Safety.

An optimal capital structure is the mix of debt and equity financing that minimizes a firm’s cost of capital and maximizes its value. The goal of an optimal capital structure is to strike a balance between the benefits of debt financing (such as tax savings and financial leverage) and the costs of debt financing (such as interest payments and financial risk).

Safety is not a feature of an optimal capital structure because it is not a goal of financial management. The goal of financial management is to maximize the value of the firm, not to minimize risk. In fact, some amount of risk is necessary for a firm to generate a return on investment.

The other options, flexibility, control, and solvency, are all features of an optimal capital structure. Flexibility refers to the ability of a firm to raise capital in different ways, such as through debt or equity financing. Control refers to the ability of a firm’s managers to make decisions without interference from creditors or shareholders. Solvency refers to the ability of a firm to meet its financial obligations.

In conclusion, the correct answer is A. Safety.

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