Conceptually, a firm's capital structure is its:
A) Mix of debt and equity capital, expressed in book-value terms.
B) Mix of debt and equity capital, expressed in market-value terms.
C) Equity capital only, expressed in book-value terms.
D) Equity capital only, expressed in market-value terms.

Question

Quizplus · Accepted Answer

A firm's capital structure refers to the way it finances its operations through a mix of debt and equity capital. The mix can be expressed in terms of book value or market value. Market value is generally considered a more accurate representation of a company's actual capital structure because it reflects the current market price of the company's outstanding securities.

Conceptually, a Firm's Capital Structure Is Its