The Term "Capital Structure" Refers To

question 97

Multiple Choice

The term "capital structure" refers to:

• A) the manner in which a firm obtains its long-term sources of funding.
• B) the length of time needed to repay debt.
• C) whether the firm invests in capital budgeting projects.
• D) which specific assets the firm should invest in.

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Definitions:

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the owner's claim on the business resources.

Net Income

The conclusive financial gain of a company upon subtracting every expense and tax from its total sales revenue.

Owner Drawings

Withdrawals of cash or other assets from a company by the owner for personal use.

Revenue

The total income generated by a business from its normal business operations.