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Question

Decisions for raising funds from long-term sources are called __________.

A
Capital structure decision
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B
Investment decisions
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C
Dividend decisions
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D
Investment of funds
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Solution

The correct option is A Capital structure decision
The capital structure is how a firm finances its overall operations and growth by using different sources of long term funds. Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock, preferred stock or retained earnings.

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