In Determining the Optimum Capital Structure, It Is Assumed That

question 84

True/False

In determining the optimum capital structure, it is assumed that the firm will raise capital in the optimum proportions every year.
The firm must constantly reevaluate its capital structure for changes, in order to allow them to change their approach in their next round of financing.

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Definitions:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered but not yet paid for.

Horizontal Analysis

A financial analysis technique that compares historical financial data over a sequence of reporting periods, using a base period to identify trends and growth patterns.

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure, facilitating comparisons.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at different points in time, side-by-side, to facilitate comparison.