The correct answer is: B. Equity Funds, Preference Capital and Long-term Debt.
Capital structure is the mix of debt and equity financing that a company uses to fund its operations. The goal of capital structure is to minimize the cost of capital while maintaining a sufficient level of financial flexibility.
Equity funds are the funds that are raised by a company through the sale of shares to investors. Preference capital is a type of equity that has a fixed dividend rate and a priority claim on assets in the event of liquidation. Long-term debt is debt that has a maturity of more than one year.
The types of capital that a company issues depend on a number of factors, including the company’s financial situation, its growth prospects, and its risk tolerance.
A. Total of Liability side of Balance Sheet is incorrect because the liability side of the balance sheet includes both debt and equity.
C. Total Shareholders Equity is incorrect because shareholders equity is only one component of capital structure.
D. Types of Capital issued by a Company is incorrect because capital structure is the mix of debt and equity financing that a company uses to fund its operations, not the types of capital that a company issues.