A firm's ________ is the mix of long-term debt and equity utilized by the firm, which may significantly affect its value by affecting return and risk.
A) dividend policy
B) capital budget
C) capital structure
D) working capital

Question

Quizplus · Accepted Answer

Capital structure refers to the mix of long-term debt and equity utilized by a firm. It affects the return and risk of a firm, therefore affecting its value. Dividend policy refers to the distribution of earnings to shareholders. Capital budget refers to the firm's decisions regarding investments in long-term assets. Working capital refers to the short-term assets and liabilities a company has in order to fund its day-to-day operations.

A Firm's ________ Is the Mix of Long-Term Debt and Equity