_____ is the single most important determinant of the capital structure of a firm.
A) Financial leverage
B) Financial risk
C) Operating income
D) Business risk
E) Sales revenue

Question

Quizplus · Accepted Answer

Business risk, or the risk associated with a company's operations, is the single most important determinant of its capital structure. This is because higher business risk typically leads to a lower debt-to-equity ratio, as lenders are less willing to provide financing to companies with riskier operations. On the other hand, companies with lower business risk may be able to take on more debt and maintain a higher debt-to-equity ratio.

_____ Is the Single Most Important Determinant of the Capital