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Capital Structure is the combination of:
AEquity, preference and long-term debt
BWorking capital and fixed capital
CCash and bank balances
DCurrent assets and liabilities
Answer & Solution
Correct answer: A. Equity, preference and long-term debt
1. Capital Structure = mix of long-term sources of finance.
2. Includes Equity, Preference share capital, and Long-term external debt.
3. Goal: minimise overall cost of capital, maximise firm value.
_Source: ICAI BoS CA Inter Paper 6A, Ch 5 "Financing Decisions — Capital Structure", §1_