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      Question

      Capital structure of a firm influences

      the:
      A Risk Correct Answer Incorrect Answer
      B Return Correct Answer Incorrect Answer
      C Both Risk and Return Correct Answer Incorrect Answer
      D Return but not Risk Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      The capital structure of a firm refers to the way it finances its operations through a combination of debt and equity. This mix of financing sources can affect both the risk and return profile of the firm.

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