Question

In: Finance

The term capital structure indicates toSelect one:a. Total assets minus liabilitiesb. long term...

The term capital structure indicates to

Select one:

a. Total assets minus liabilities

b. long term debt and common stock equity

c. All of the above

d. Shareholders equit

Solutions

Expert Solution

The concept of capital structure denotes the % of proportion between debt and equity with which the firm will be get financed.

For example: If a company raises $ 100,000 from equity and also takes $ 100,000 loan from bank, in this case, it is said that the firm is financed with 50% debt and 50% equity.

So, the term capital structure indicates to long term debt and common stock equity

Hence the correct answer is option b i.e. long term debt and common stock equity

jeff jeffy answered 2 years ago
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