Managers are probably best qualified to predict when A. currency exchange rates are most favorable. B. a firm they wish to acquire is most undervalued. C. market interest rates are at their lowest point. D. interest rates are peaking. E. their company's stock is overvalued

The correct answer is letter "E": their company's stock is overvalued.

Explanation:

When a company's stock is overvalued market analysts and investors may notice it sooner or later. Then, managers can expect the stock price to fall at a certain point. In the meantime, executives can identify the weaknesses and threats of the company after the stock price drops so when it happens the firm will have a contingency plan structured.

Thus, a stock overvaluation represents an opportunity for the company to get prepared for future downturns in its stock price.

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answer; capital structure decision;