29 swered ut of 1.0 Select one: uestion O True The difference between a firm\'s

Question

29 swered ut of 1.0 Select one: uestion O True The difference between a firm's current assets and its current liabilities is called net working capital. O False n30 The best definition of capital structure is: Select one: O a. How a firm is financed through different proportions of debt and equity. o b. The possibility of conflicts between shareholders and management in a large corporation. out of 1.0 question c. Avenue where long-term debt and equity securities are bought and sold. o d. The process of planning and managing a firm's long-term investments. O e. A venue where buyers ans sellers of capital equipment come together to trade such assets.

Explanation / Answer

1.

The difference between a firm's current assets and it's current liabilities is called net working capital.

The given statement is true.

Current assets are known as gross working capital and the difference of current assets and current liabilities is termed as net working capital.

2.

The best definition of capital structure is:

(a) How a firm is financed through different proportions of debt and equity.

A mix of various long term sources of funds employed by a firm is called capital structure. Capital structure represents only long term sources of funds and excludes all short term debt and current liabilities.

Hence, correct option is (a)

All other options are incorrect as far as definition of capital structure is concerned.

Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubts. Thanks.

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