The ﬁrm's capital structure refers to:
A)the way a ﬁrm invests its assets.
B)the amount of capital in the ﬁrm.
C)the amount of dividends a ﬁrm pays.
D)the mix of debt and equity used to ﬁnance the ﬁrm's assets.
E)how much cash the ﬁrm holds.

Question

Quizplus · Accepted Answer

Capital structure refers to the mix of debt and equity that a firm uses to finance its assets, so the correct choice is (D). Choices (A), (B), (C), and (E) are not relevant to the concept of capital structure.

The ﬁRm's Capital Structure Refers To