Multiple choice

Which of the above statements are the two principles of capital structure?

Consider the given statements:

1. It must be balanced with adequate equity cushion.

2. It must be balanced with adequate debt cushion.

3. Ratio of funded debts to equity should be geared to the degree of stability.

4 . Ratio of equity to funded debts should be geared to the degree of stability.

  1. 3 and 4

  2. 2 and 3

  3. 1 and 3

  4. 1 and 4

  5. 1 and 2

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Correct