Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Business Organization

Financial Accounting

1. Introduction to Accounting

Business Organization

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

A firm's target capital structure represents:

the mix of debt, preferred stock, and common equity that the firm aims to maintain over time

the proportion of retained earnings to total assets

the minimum amount of equity required by law

the actual capital structure currently used by the firm

Previous problemNext problem

Verified step by step guidance

Understand the concept of 'target capital structure': It refers to the mix of financing sources (debt, preferred stock, and common equity) that a firm aims to maintain over time to optimize its cost of capital and achieve its financial goals.

Analyze the options provided in the problem: Evaluate each option to determine which aligns with the definition of 'target capital structure.'

Option 1: 'The mix of debt, preferred stock, and common equity that the firm aims to maintain over time' matches the definition of target capital structure, as it reflects the firm's long-term financial strategy.

Option 2: 'The proportion of retained earnings to total assets' does not align with the concept of target capital structure, as it focuses on a specific financial ratio rather than the overall mix of financing sources.

Option 3: 'The minimum amount of equity required by law' and Option 4: 'The actual capital structure currently used by the firm' are unrelated to the firm's target capital structure, as they focus on legal requirements and current practices rather than the firm's strategic financial goals.