The capital structure decision mainly refers to the decision of:
2019
The capital structure decision mainly refers to the decision of:
- A.
Working capital
- B.
Financing
- C.
Dividend policy
- D.
Investments
Attempted by 76 students.
Show answer & explanation
Correct answer: B
The capital structure decision deals with determining the proportion of debt and equity used to finance the firm’s assets. It focuses on how a company raises funds — whether through borrowed funds (debt) or owners’ funds (equity) — to achieve an optimal balance that minimizes the cost of capital and maximizes the value of the firm.