Mr. Webster, the CEO of Master Works, Inc., recently stated that the firm will maintain its current policy of borrowing $0.40 for every $1 invested by shareholders. Mr. Webster was referring to the _____ policy of the firm.
A) Capital budgeting.
B) Working capital.
C) Capital structure.
D) Capital investment.
E) Financial planning.

Question

Quizplus · Accepted Answer

Mr. Webster's statement about borrowing $0.40 for every $1 invested by shareholders refers to the firm's capital structure policy. This policy involves decisions about the firm's mix of debt and equity financing.

Mr Webster, the CEO of Master Works, Inc