The Mixture of Debt and Equity Used by the fiRm

question 96

Multiple Choice

The mixture of debt and equity used by the firm to finance its operations is called:

• A) Working capital management.
• B) Financial depreciation.
• C) Agency cost analysis.
• D) Capital budgeting.
• E) Capital structure.

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Definitions:

Cheques

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a specified person.

Deposits

Funds placed into an account at a banking institution for safekeeping, which can include money market accounts, savings accounts, and certificates of deposit.

Outstanding

Refers to shares that are currently held by investors, including both public shareholders and restricted company shares.

Adjusted Bank Balance

The bank account balance after accounting for transactions like outstanding checks and deposits in transit.