Homework SourseA firms capital structure refers to the firms A mixture of v
A firm\'s capital structure refers to the firm\'s:
A. mixture of various types of production equipment.
B. Investment selections for its excess cash reserves.
C. combination of cash and cash equivalents.
D. combination of accounts appearing on the left side of its balance sheet.
E. proportion of financing from current and long-term debt and equity.
A firm\'s capital structure refers to the firm\'s:
A. mixture of various types of production equipment.
B. Investment selections for its excess cash reserves.
C. combination of cash and cash equivalents.
D. combination of accounts appearing on the left side of its balance sheet.
E. proportion of financing from current and long-term debt and equity.
A firm\'s capital structure refers to the firm\'s:
A. mixture of various types of production equipment.
B. Investment selections for its excess cash reserves.
C. combination of cash and cash equivalents.
D. combination of accounts appearing on the left side of its balance sheet.
E. proportion of financing from current and long-term debt and equity.
Solution
A firm\'s capital structure refers to the firm\'s proportion of financing from current and long-term debt and equity.
Therefore correct answer is option: E. proportion of financing from current and long-term debt and equity.
The capital structure of a firm is based on the arrangement of different sources of funds which are used to finance the operations of the firm. The target capital structure of firms generally consists of debt, preferred stock and common equity and an optimum mix of capital structure is good for overall business of the firm.
