Multiple choice

Capital structure represents

  1. ratio between different forms of capital

  2. all liabilities

  3. all assets

  4. assets and liabilities
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A Correct answer
Explanation

Capital structure represents the proportion or ratio between different forms of capital - primarily debt and equity. It shows how a company finances its operations and growth through different sources of funds. It's not about all liabilities, all assets, or the entire balance sheet - it specifically focuses on the mix of long-term financing.

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