The mixture of debt and equity used by the ﬁrm to ﬁnance its operations is called:
A) Working capital management.
B) Financial depreciation.
C) Agency cost analysis.
D) Capital budgeting.
E) Capital structure.

Question

Quizplus · Accepted Answer

The mixture of debt and equity used to finance a firm's operations is known as its capital structure. Working capital management refers to the management of a firm's short-term assets and liabilities, while financial depreciation is the reduction in the value of an asset over time due to wear and tear. Agency cost analysis is an assessment of the costs associated with conflicts of interest between a firm's shareholders and its managers. Capital budgeting is the process of evaluating and selecting long-term investment opportunities. Therefore, the correct answer is E.

The Mixture of Debt and Equity Used by the ﬁRm