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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