Capital structure decisions include which of the following?
A) Determining the number of shares of stock to issue.
B) Determining whether the ﬁrm should purchase or lease some equipment.
C) Allocating funds to the various divisions within the ﬁrm.
D) Evaluating the size of inventory to be kept on hand.
E) Evaluating the customer credit policy.

Question

Quizplus · Accepted Answer

Capital structure decisions refer to decisions related to the long-term financing of the firm, specifically decisions regarding the mix of debt and equity used to finance a company's assets. Determining the number of shares of stock to issue is directly related to equity financing, and therefore falls under the category of capital structure decisions. The other options listed are not related to capital structure decisions.

Capital Structure Decisions Include Which of the Following