General Studies · Financing and Capital Structure Decisions
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Financing decisions are primarily concerned with the management of a firm's current assets and current liabilities to ensure smooth day-to-day operations. Reason R: An optimal capital structure is achieved by balancing the mix of debt and equity to minimize the weighted average cost of capital and maximize the firm's value. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct and R is the correct explanation of A
- 2Both A and R are correct but R is NOT the correct explanation of A
- 3A is correct but R is not correct
- 4A is not correct but R is correct✓
Correct answer
A is not correct but R is correct
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