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Question
When the proportion of debt and equity is such that it results in an increase in the value of equity share the ______ is/are said to be optimal.
Options
working capital
fixed capital
capital structure
Both (a) and (b)
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Solution
When the proportion of debt and equity is such that it results in an increase in the value of equity share the capital structure is/are said to be optimal.
Explanation:
The ratio of debt to equity increases the value of equity shares when a company has an ideal capital structure.
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