The optimum capital structure of a company is planned as per considerations of which of the following?
I. Profitability
II. Solvency
III. Marketability of shares
IV. Control

I, II and IV only

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II, III and IV only

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I and II only

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III and IV only

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Solution

The correct option is A I, II and IV only
Capital structure refers to the pattern a firm chooses to finance its assets and investments with the combination of equity, debt, or internal funds.
The optimal ratio of debt to equity reduces the risk of insolvency, and help the company continue to be successful and ultimately remain or to become profitable.

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