The term capital structure describes:

A) The mixture of debt and equity a firm uses to finance its operations.
B) The mixture of long-term investments a firm has made.
C) The mix of preferred stock and common stock that makes up the equity account of a firm.
D) The firm's short-term assets and short-term liabilities.
E) The mixture of short-term liabilities a firm uses to finance its short-term assets.

Capital Structure

The mix of different forms of external funds and equity that a company uses to finance its operations and growth.

Debt and Equity

Two of the main ways companies can raise capital; debt involves borrowing money, whereas equity involves selling a stake in the company.

Equity Account

An account that represents the owner's equity or interest in a company, usually comprising investments made by the shareholders and retained earnings.