GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which is the determinants of Capital Structure?
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Tax
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Control
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Government Policy
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Requirement of Investors
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Explanation:
Detailed explanation-1: -Choice of investors. Capital market condition. Period of financing. Cost of financing.
Detailed explanation-2: -The significant determinants of optimum capital structure are risk, cost of capital, flexibility, conservatism, sales and growth, inflation, and cash flow.
Detailed explanation-3: -“Capital structure” is defined as the mix of debt and equity securities used to finance real investment. Capital structure reflects the firm’s financing strategy, for example, its overall target debt-equity ratio, and also financing tactics, for example, the design and timing of a particular debt issue.
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