the firm's capital structure refers to

The firm’s capital structure refers to the: Multiple Choice amount of cash versus receivables the firm holds. D. obtaining the necessary funds to finance a firm's daily activities. A) An optimal B) An irrelevant C) A perfect D) A minimal. In other words, it shows the proportions of senior debt, subordinated debt and equity (common or preferred) in the funding. A. amount of dividends a firm pays. B. amount of capital invested in the firm. In other words, it shows the proportions of senior debt, subordinated debt and equity (common or preferred) in the funding. Financial Structure – It may be defined as the extent to which funds are available with a business to finance its business activities and fixed assets. Type of securities to be issued are equity shares, preference shares and long term borrowings (Debentures). A business organization utilizes the funds for meeting the everyday … It also involves applying management principles to an organization’s financial assets, while also playing an important role in financial management. b) current assets and current liabilities. _____refers to the mix of a firm’s capitalization and includes long term sources of funds. A firm's capital structure refers to the firm's: proportions of financing from current and long-term debt and equity. D. mix of debt and equity used to finance the firm's assets. A.Short - term resources. E. how much cash the firm holds. There is difference of opinion on the relationship between capital structure and value of the firm. A firm's capital structure refers to the firm's: A. mixture of various types of production equipment. D. the mix of debt and equity used to finance the firm's assets. asked Mar 22, 2019 in Business Studies by Jahanwi (73.4k points) The term "capital structure" refers to: a) long-term debt, preferred stock, and common stock equity. 6/29/2021 TEST 1 Question 4 Not yet answered Marked out of 1.00 A firm's capital structure refers to the firm's a. proportions of financing from current and long-term debt and equity. proportions of financing from current and long-term debt and equity. the amount of dividends a firm pays. It is the permanent financing of a firm represented by long-term debt, preferred stock and net worth. E. amount of cash versus receivables the firm holds. 1.It helps the financial manager to design an optimum capital structure. 49. It allows a firm to understand what kind of funding the company uses to finance its overall activities and growth. 1. mix of current and fixed assets a firm holds. Background and Research Problem Capital structure refers to the combination of debt and equity capital that a firm uses to finance its long-term operations. Keywords: Corporate capital Structure, Firm value, Finance, Growth Opportunity, Liquidity 1. the firm’s value and consequently, financial policy decision does not change the firm’s market value and cost of capital. 78)The mix of debt and equity by which a corporation is financed refers to the firm's:A)C)B)Capital structure budgeting capital management. A firm's capital structure can be a tricky endeavor because both debt financing and equity financing carry respective advantages and disadvantages. One disadvantage of the corporate form of business ownership is the: double taxation of profits. C.Long - term resources. C. combination of cash and cash equivalents. Question Purchase it . Transcribed Image Text: QUESTION 20 The term "capital structure" refers to: O the manner in which a firm obtains its long-lem sources of funding. A firm’s capital structure refers to the maturity of debt it employs. A company’s proportion of short- and long-term debt is considered when analyzing capital structure. The capital structure is made up of debt and equity securities and refers to permanent financing of a firm. O whether the firm invests in capital budgeting projects O which specific assets the firm should invest in. It is composed of long-term debt, prefer­ence share capital and shareholders’ funds. 78) 79)Mr. Webster, the CEO of Master Works, Inc., recently stated that the firm will maintainits current policy of borrowing $.40 for every $1 invested by shareholders. "Changing our capital structure is the most important decision we as farmers ... Fonterra's focus is now on delivering the strategic commitments the business has made, he said. With the vote passed, the co-operative now needs to get the government on ... Capitalisation refers to the total amount of securities issued by a company while capital structure refers to the kinds of securities and the proportionate amounts that make up capitalisation. B.All the financial resources. Equity and debt are the securities most commonly used. C. the amount of dividends a firm pays. B. Equity and debt are the securities most commonly used. The firm's capital structure refers to: A. the way a firm invests its assets. O combination of cash and cash equivalents. B. the amount of capital in the firm. Equity shares, Preference Shares and Debentures. Question 1. The capital structure of a firm refers to the firm's: a. current assets and liabilities. amount of capital invested in the firm. Investment selections for its excess cash reserves. Relative ratio of securities can be determined by process of capital gearing. b. combination of cash and cash equivalents. True. combination of cash and cash equivalents. When equity is used without debt, the firm is said to be unlevered. Capital structure ratios tend to fall within a narrow range within industries. d) shareholders' equity. Various authors have defined capital structure in different ways. The agency theory viewpoint of debt has had a The optimum capital structure may be defined as that capital structure or combination of debt and equity that leads to the maximum value of the firm. Which of the following refers to capital structure? Meanwhile, a risky company with tons of debt may have to pay 15% or more in exchange for debt capital. A firm's capital structure. Working Capital Management The term working capital refers to a firm’s short-term assets, such as inventory, and its short-term liabilities, such as money owed to suppliers. amount of dividends a firm pays. proportions of financing from current and long-term debt and equity. The following factors affect the capital structure and the use of leverage by management:Capital structure policies and targetsCapital investment financingMarket conditionsAsymmetric information a. the mix of debt and equity used to finance the firm's assets. The capital structure indicators refer to long-term debt, short-term debt; total debt and total equity, while return on assets and return on equity are the performance proxies. CONCEPTS MAXIMIZATION OF FIRM VALUE b So it relates to the arrangement of capital and excludes short-term borrowings. Capital structure of a company refers to the composition or make-up of its capitalization and it includes all long term capital resources viz :- loans, reserves, shares and bonds. Westerfield and Jordan, (2004) also state that capital structure refers to the relative amounts of debt and equity a firm utilises to finance its operational activities. d. the mix of debt and equity used to finance the firm's assets. The resulting EPS will tell us if this capital structure is the best way to fund the growth plan and also improve EPS. Capital structure decisions depend upon several factors. _____ of a firm refers to the composition of its long-term funds and its capital structure. C) mixture of various types of production equipment. 78) 79)Mr. Webster, the CEO of Master Works, Inc., recently stated that the firm will maintainits current policy of borrowing $.40 for every $1 invested by shareholders. 3. investment selections for its excess cash reserves. Capital structure refers to the degree of long term financing of a business concern as in the form of debentures, preference share capital and equity share capital including reserves and surplus. Capital Structure Capital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. Difficulty level: Easy 15-3 II. The firm's capital structure refers to: A. the way a firm invests its assets. 2. Financial risk refers to the extra risk borne by stockholders as a result of a firm's use of debt as compared with their risk if the firm had used no debt. Capital structure in corporate finance is the mix of various forms of external funds, known as capital, used to finance a business.It consists of shareholders' equity, debt (borrowed funds), and preferred stock, and is detailed in the company's balance sheet.The larger the debt component is in relation to the other sources of capital, the greater financial leverage (or gearing, in the … 48. “Capital structure is the combination of debt and equity securities that comprise a firm’s financing of its assets.”—John J. Hampton. Definition: Capital structure refers to an arrangement of the different components of business funds, i.e. A firm that is AAA rated can borrow at very low rates. 0 votes. There are two parts to the capital structure of a business: EQUITY. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. Expert Solution. When equity is used without debt, the firm is said to be unlevered. B. W orking capital decisions. D ividend decisions. C.Ensuring Financial discipline in the firm. ANSWER: B 2.Financial structure refers to _____. What is the firm’s optimal capital structure . False. Capital structure refers to the mix of debt and equity financing a company uses to fund its operations. 2. D.All of these. c) the creation of value for shareholders. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .----- refers to the risk associated with the capital structure composition The capital structure of a company refers to the mixture of equity and debt finance used by the company to finance its assets. The different types of funds that are raised by a firm include preference shares, equity shares, retained earnings, long-term loans etc. B. the amount of capital in the firm. A firm’s capital structure refers to the firm’s: mixture of various types of production equipment. Capital structure can be a mixture of a firm’s long-term debt, short-term debt, common equity and preferred equity. D. the mix of debt and equity used to finance the firm's assets. D.All of these. 6/29/2021 TEST 1 Question 4 Not yet answered Marked out of 1.00 A firm's capital structure refers to the firm's a. proportions of financing from current and long-term debt and equity. For raising long-term finances, a company can issue three types of securities viz. (C) the amount of dividends a firm pays. D) proportions of financing from … In early 2021 Quantum Corporation (QMCO) shares gained a substantial boost, suggesting the Quantum Corporation may continue to grow on the back of significant... Greenpro Capital Corp. [NASDAQ: GRNQ] surged by $0.05 during the normal trading session on Tuesday and reaching a high of $3.34 during the day while it closed the day at $2.78. A. _____ of a firm refers to the composition of its long -term funds and its capital structure: Learn Accounting. This is the capital provided by shareholders or the owners of a business. a the types of projects a firm invests in the amount of long-term debt and equity a firm has on its balance sheet c the amount of short-term assets and short-term liabilities a firm has on its balance sheet d the size, timing, and risk of a firm's future cash flows. A company's ideal capital structure will depend on its specific situation, including factors like the cost of capital, the business cycle, and any existing debt or equity. how much cash the firm holds. _____refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure? Capital structure refers to a company’s collective outstanding debt and equity. 2. Mr. A general rule for managers to follow is to set the firm's capital structure such that: The capital structure involves two decisions-. E. how much cash the firm holds. Capital structure planning refers to the designing of an appropriate capital structure in the context of the facts and circumstances of each firm. When analysts refer to capital structure, they are most likely referring to a firm’s debt-to-equity (D/E) ratio, which provides insight into how risky … ANSWER: True. Equity capital includes: Working capital management refers specifically to: A. the oversight of a firm's current accounts. cbse. ANSWER: B 2.Financial structure refers to _____. Question # 00146321 Subject Accounting Topic Accounting Tutorials: 1. The capital structure refers to the balance of this finance in terms of how much is equity (or share capital) and how much is is in the form of debt. current assets and current liabilities. 1. total assets minus liabilities. The different types of funds that are raised by a firm include preference shares, equity shares, retained earnings, long-term loans etc. A firm’s capital structure refers to the firm’s: Disclaimer: If you need a custom written term, thesis or research paper as well as an essay or dissertation sample, choosing Essay Host - a relatively cheap custom writing service - is a great option. Capital Structure is a combination of financial instruments like equity shares, preference shares, long-term loans, debentures, bonds or retained earnings that a business uses to raise funds for its operations. The effect of capital structure on a firm's liquidation decision, in particular refer to debt financing. 2.2 Optimal capital structure. (ii) Risk The use of debt adds to the risk of the company and shareholder. Capital structure is a … asked Jun 5, 2016 in Business by Megatron. combination of cash and cash equivalents. The optimum capital structure implies that combination of debt and equity at which overall cost of capital is minimum and value of the firm is maximum. Previous studies indicate asset tangibility, tax, risk, liquidity and inflation as capital structure determinants in Romanian manufacturing companies. c. the amount of dividends a firm pays. ANSWER: B 3.The market value of the firm is the result of_____. M. Pandey. The firm's capital structure refers to the: Multiple Choice amount of cash versus receivables the firm holds. One is the firm's business risk—the risk pertaining to the line of business in which the company is involved. The term "capital structure" refers to: long-term debt, preferred stock, and common stock equity. There should be a proper mix between debt capital and equity capital. Capital structure refers to a company’s use of debt and equity as a means of financing operations and purchasing assets. Financial risk is associated with the capital structure pattern of the firm. The term “Capital structure” refers to the relationship between: Debentures, preference share and equity share capital. A company’s capital structure is helpful in understanding its current financial health, risk profile and compatibility with specific investment or acquisition strategies.Understanding the dynamics and interplay of debt and equity and their … Capital structure is the mix of the long-term sources of funds used by a firm. _____ capital structure refers to a combination of debt and equity that maximizes the value of the firm. E. proportion of financing from current and long-term debt and equity. Meaning of capital or financial structures Capital structure refers to the mix between owners’ fund (equity) and borrowed funds (debt). (B) he amount of capital in the firm. The firm's capital structure refers to: the way a firm invests its assets. Capital structure describes the mix of a firm's long-term capital, which consists of a combination of debt and equity. over, capital structure decisions are also likely to affect a firm's competitive position (Balakrishnan and Fox, 1993). The firm's capital structure refers to: A) the way a firm invests its assets. A firm's capital structure refers to the firm's: O mixture of various types of production equipment. D.All of these. the firm's capital structure refers to: the mix of the debt and equity used to finance the firm's assets. mix of current and fixed assets a firm holds. 78)The mix of debt and equity by which a corporation is financed refers to the firm's:A)C)B)Capital structure budgeting capital management. C. amount of dividends a firm pays. The meaning of Capital structure can be described as the arrangement of capital by using different sources of long term funds which consists of two broad types, equity and debt. the proportion of debt and equity that results in the lowest weighted average cost of capital (WACCWACCWACC is a firm’s Weighted Average Cost of Capital and represents its blended cost of capital including equity and debt.) The total capital structure of a firm is represented in figure 27.1: ‘Financial structure’ in the entire left hand side of the company’s balance sheet which includes current liabilities (equivalent to asset structure). C.Long - term resources. However, a company heavily funded by debt has an aggressive capital structure and poses a greater risk to investors. B. W orking capital decisions. b. combination of cash and cash equivalents. 2. Background and Research Problem Capital structure refers to the combination of debt and equity capital that a firm uses to finance its long-term operations. O investment selections for its excess cash reserves. Some companies could be all-equity-financed and have no debt at all, whilst others could have low levels of equity and high levels of debt. The capital structure of a company is made up of debt and equity securities that comprise a firm’s financing of its assets. b. D ividend decisions. The firm's capital structure refers to: a. the way a firm invests its assets. The debt capital in a company's capital structure refers to borrowed money that is at work in the business. c) Under-capitalisation (D) the mix of debt and equity used to finance the firm's anses 2 See answers Advertisement Advertisement a) the number and types of products or services provided by the firm. b. long-term debt and equity. The primary goal of financial management is to: maximize the current value per share of the existing stock. Since capital structure is the amount of debt or equity or both employed by a firm to fund its operations and finance its assets, capital structure is typically expressed as a … Managers, therefore, use industry capital structure ratios as a guide for optimizing their own company's capital structures. a) Capitalisation Capitalization Structure: The proportion of debt and equity in the capital configuration of a company. B. the daily use of a firm's fixed assets to generate revenue. C. the amount of dividends a firm pays. Refers to the effects that fixed costs have on the returns that shareholders earn; higher leverage generally results in higher but more volatile returns. Capital Structure in a Perfect Market Chapter Synopsis 14.1 Equity Versus Debt Financing A firm’s capital structure refers to the debt, equity, and other securities used to finance its fixed assets. D. the mix of debt and equity used to finance the firm's assets. A general rule for managers to follow is to set the firm's capital structure such that: _____ of a firm refers to the composition of its long -term funds and its capital structure: A:Capitalisation,B:Over Capitalisation,C:Under Capitalisation,D:Market Capitalisation Capital structure decisions refer to the A. dividend yield of the firm’s stock B. blend of equity and debt used by the firm C. capital gains available on the firm’s stock D. maturity date for the firm’s securities A.Short - term resources. O the length of time needed to repay debt. C. the amount of dividends a firm pays. D. the mix of debt and equity used to finance the firm 's assets . … B) combination of accounts appearing on the left side of its balance sheet. • Capital structure refers to a company’s outstanding debt and equity. b. the amount of capital in the firm. A firm's capital structure. Students should practice Capital Structure Decisions – CS Executive Financial and Strategic Management MCQ Questions with Answers based on the latest syllabus. Capital structure does … finance; 0 Answers. It allows a firm to understand what kind of funding the company uses to finance its overall activities and growth. Corporate structure. A typical corporate structure consists of various departments that contribute to the company's overall mission and goals. Common departments include Marketing, Finance, Operations management, Human Resource, and IT. These five divisions represent the major departments within a publicly traded company, though there are often ... Leave a Reply Cancel reply. b) the minimization of the amount of taxes paid by the firm. Though ULIPs (Unit Linked Insurance Plan) are considered to be a better investment vehicle it has failed to capture the imagination of the retail investors in India because of … Capital structure refers to the way that a business is financed—the mix of debt and equity that allows a business to keep the doors open and the shelves stocked. These long-term options help firms carry out their economic activities to generate profits. D.All of these. d) the dollars profits earned by the firm. shareholder’s funds and borrowed funds in proper proportion. Capital Structure is referred to as the ratio of different kinds of securities raised by a firm as long-term finance. 1. Mr. A firm's capital structure can be a tricky endeavor because both debt financing and equity financing carry respective advantages and disadvantages. A. The firm's capital structure refers to: A. the way a firm invests its assets. C.Ensuring Financial discipline in the firm. D. combination of accounts appearing on the left side of its balance sheet. Capital Structure or Leverage Ratio. amount of capital invested in the firm. Advantages of capital structure are: (Any two) (i) Return The capital structure should give maximum return to the shareholder. Here, the premium finds its way to the picture depending on the volume of debts the firm owes. Hamada (1972) investigated the risk factor in relation to capital structure and described that capital structure is significantly associated with systematic risk and explains about 21% to 24% systematic risk of firm. The meaning of Capital structure can be described as the arrangement of capital by using different sources of long term funds which consists of two broad types, equity and debt. It is made up of debt and equity securities and refers to permanent financing of a firm. the amount of capital in the firm. A firm’s capital structure refers to the maturity of debt it employs. In other words, it shows the proportions of senior debt, subordinated debt and equity (common or preferred) in the funding. The term capital structure refers to. The higher the debt capital, the more is the risk compared to a firm that has relatively low debts. Capital Structure is optimal when the proportion of debt and equity maximizes the value of the equity share of the company. 7. 2. _____ of a firm refers to the composition of its long-term funds and its capital structure. e. how much cash the firm holds. The cost depends on the health of the company's balance sheet. While ‘capital structure’ refers to sources of long- term funds. B.All the financial resources. c. available cash. Categories Questions. According to Arnold (2008) addressed that capital structure refers to the way a corporation finances its assets through some combination of equity , debt. E. how much cash the firm holds. D)E)Leverage management management. b) Over-capitalisation . There are two firms P and Q which are identical except P does not use any debt in its capital structure while Q has ₹ 8,00,000, 9% debentures in its capital structure. MCQs on Capital Structure. Both the firms have EBIT of ₹ 2,60,000 p.a. “Capital structure refers to the mix of long-term sources of funds, such as, debentures, long-term debts, preference share capital and equity share capital including reserves and surplus.”—I. This risk, however, may be the primary source of the firm’s growth. Capital Structure in a Perfect Market Chapter Synopsis 14.1 Equity Versus Debt Financing A firm’s capital structure refers to the debt, equity, and other securities used to finance its fixed assets. _____ of a firm refers to the composition of its long -term funds and its capital structure: A:Capitalisation,B:Over Capitalisation,C:Under Capitalisation,D:Market Capitalisation 49. Financial risk B. … It increases earning per share (EPS) as … 1) A firm’s capital structure refers to the firm’s: A) combination of cash and cash equivalents. This works out to a projected EPS of $3.05, well below the existing $5 per share. d. organizational chart. shareholders' equity. and the capitalization rate is 10%. D)E)Leverage management management. financial leverage impacts the performance of the firm by: increasing the volatitity of the firm's net income. Keywords: Corporate capital Structure, Firm value, Finance, Growth Opportunity, Liquidity 1. A firm’s capital structure decision includes its choice of a target capital structure, the average maturity of its debt, and the specific types of financing it decides to use at any particular time. • Capital structure refers to a company’s outstanding debt and equity. combination of accounts appearing on the left side of its balance sheet. Which of the following is not a primary function of a Bank? _____refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure? 1. Capital Structure Decisions – Financial and Strategic Management MCQ. B. the amount of capital in the firm. Following this premise, this paper builds on research in both disciplines to suggest that financial strategies may be influenced by a firm's corporate strategies. The firm's capital structure refers to the: A. mix of current and fixed assets a firm holds. ... Next Post Next In an MM world, restructuring the firm will not change its overall value. Capital Structure Capital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. investment selections for its excess cash reserves. The numerical measure of the firm’s financial leverage. A critical assumption of the net operating income (NOI) approach to valuation is: that debt and equity levels remain unchanged. ANSWER: B 3.The market value of the firm is the result of_____. Therefore, an optimum capital structure refers to the optimum combination of debt and equity, which leads to maximization of firm`s value and minimization of its weighted average cost of capital. Managing the firm’s working capital is a day-to-day activity that ensures the firm has sufficient resources to continue its operations and avoid costly interruptions. combination of accounts appearing on the left side of its balance sheet. Offered Price: $ 6.00 Posted By: solutionshere Posted on: 12/05/2015 12:29 PM Due on: 01/04/2016 . Financial management refers to the strategic planning, organizing, directing and controlling of financial undertakings in an organization or an institution. C. the utilization of a firm's assets on a daily basis. A firm’s capital structure refers to the firm’s: mixture of various types of production equipment. a) Capitalisation . It allows a firm to understand what kind of funding the company uses to finance its overall activities and growth. c) total assets minus liabilities.

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