Which of the following is an example of a capital structure?
A)15 percent current assets and 85 percent fixed assets
B)10 percent current liabilities and 90 percent long-term debt
C)20 percent debt and 80 percent equity
D)None of these

Question

Quizplus · Accepted Answer

Capital structure refers to the way a company finances its operations through a mix of debt and equity. Option C represents a capital structure with 20% debt (long-term liabilities) and 80% equity (common stockholders' equity). Option A and B are not a clear representation of capital structure as they only represent the composition of assets and liabilities. Option D is incorrect as there are valid examples of capital structure given in the other options.

Which of the Following Is an Example of a Capital