Capital budgeting is the mix of debt and common equity (as well as preferred equity)of a firm.

Question

Quizplus · Accepted Answer

Capital budgeting is the process used by companies to evaluate long-term investments in assets such as property, plant, and equipment, and determine the mix of debt, equity, and retained earnings used to finance these investments. However, the mix itself is not capital budgeting but rather part of the financing decision.

Capital Budgeting Is the Mix of Debt and Common Equity