Question

Capital structure includes:

• A. Share capital
• B. Deposits from public
• C. Preference share
• D. Debenture

Hint:

Capital structure includes long-term sources of finance like equity, preference shares, and debentures, but not short-term deposits.

Answer 1

The Correct Option is A

Step 1: Understanding capital structure.
Capital structure refers to the mix of long-term sources of finance used by a company. It shows the proportion of debt and equity in the company’s total capital.

Step 2: Components of capital structure.
Capital structure typically includes: - Equity share capital
- Preference share capital
- Debentures and long-term loans
Public deposits are considered a short-term source of finance and are therefore not included in capital structure.

Step 3: Analysis of options.
- (A) Share capital: Part of capital structure.
- (B) Deposits from public: Not part of capital structure (short-term).
- (C) Preference share: Included in capital structure.
- (D) Debenture: Included in capital structure.

Step 4: Conclusion.
The correct answers are (A) Share capital, (C) Preference share, and (D) Debenture.