Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

The mix between debt and owners fund is known as:

Options:

Financial Decision

Working capital

Fixed capital

Capital structure

Correct Answer:

Capital structure

Explanation:

The correct answer is Option (4) → Capital structure

Capital structure refers to the mix or proportion of debt and owners’ funds (equity) used to finance a company’s operations and growth. It shows how a firm balances borrowed funds and shareholders’ investment to achieve an optimal financing arrangement that minimizes cost and risk.

  • Financial Decision is a broad term for decisions related to finance, one category of which is the capital structure decision.

  • Working capital is the difference between a company's current assets and current liabilities (used for day-to-day operations).

  • Fixed capital refers to funds invested in long-term assets like land, buildings, and machinery.