This is the mix of debt and equity that a firm uses to finance its operations.

Question

Quizplus · Accepted Answer

Capital structure refers to the combination of debt and equity securities that a company uses to finance its operations. This includes the proportion of debt and equity used, as well as the specific types of securities used within each category. Capital structure decisions can have a significant impact on a company's financial performance and risk profile. Therefore, it is essential for a company to carefully consider its capital structure and strive to maintain an optimal balance between debt and equity.

This Is the Mix of Debt and Equity That a Firm