The factor affecting choice of Capital Structure is:
(A) Tax Rate
(B) Control
(C) Capital Structure of other Companies
(D) Operating Efficiency
Choose the correct answer from the options given below:
The factor affecting choice of Capital Structure is:
(A) Tax Rate
(B) Control
(C) Capital Structure of other Companies
(D) Operating Efficiency
Choose the correct answer from the options given below:
Solution
✅ Correct Option: 2
Factors affecting capital structure include tax rate (higher tax makes debt cheaper), control considerations (equity dilutes control), and capital structure of other companies in the industry, which serves as a benchmark. Operating efficiency is not listed as a determinant of capital structure. Hence (A), (B) and (C) only.
Related questions:
2025: 14 May Shift 1
2025: 14 May Shift 2
2025: 14 May Shift 2
2026: 23 May Shift 2