Assertion :Capital structure refers to composition of long-term funds. Reason: These include equity share capital, preference share capital, debentures, all debts and all reserves.

Both Assertion and Reason are correct and Reason is the correct explanation for Assertion

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Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion

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Assertion is correct but Reason is incorrect

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Both Assertion and Reason are incorrect

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Solution

The correct option is B Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion
Capital structure refers to composition of long term funds like equity share capital, preference share capital, debentures but not all debts (short term debts) not all reserves are included in long term funds.

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