GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Risk principle
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Cost and control principle
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Both (a) and (b)
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None of the above
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Detailed explanation-1: -Capital structure refers to the specific mix of debt and equity used to finance a company’s assets and operations. From a corporate perspective, equity represents a more expensive, permanent source of capital with greater financial flexibility.
Detailed explanation-2: -Debt and Equity are the two primary types of capital sources for a business.
Detailed explanation-3: -1. The term “capital structure” refers to: long-term debt, preferred stock, and common stock equity.
Detailed explanation-4: -Capital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. A firm’s capital structure is typically expressed as a debt-to-equity or debt-to-capital ratio.