A firm's ______ is the combination of debt and equity it uses to finance its assets.
A)capital budgeting plan
B)business risk
C)asset structure
D)securitization table
E)capital structure

Question

A firm's ______ is the combination of debt and equity it uses to finance its assets. 
A)capital budgeting plan
B)business risk
C)asset structure
D)securitization table
E)capital structure

Quizplus · Accepted Answer

Capital structure refers to the mix of debt and equity financing that a firm uses to finance its assets. The capital structure decision is important because it affects the firm's cost of capital, financial flexibility, and risk profile. The capital structure can be adjusted over time as the firm's needs and circumstances change.

A Firm's ______ Is the Combination of Debt and Equity