The decision to issue additional shares of stock is an example of: Select one: a. working capital management. b. a net working capital decision. c. capital budgeting. d. a controller's duties. e. a capital structure decision.

Question

Business

Booth

6 July, 04:46

The decision to issue additional shares of stock is an example of: Select one: a. working capital management. b. a net working capital decision. c. capital budgeting. d. a controller's duties. e. a capital structure decision.

+4

Answers (1)

Know the Answer?

Curtis Benson · Answer 1

e. a capital structure decision.

Explanation:

Capital structure refers to the combination of debts and equity used to finance business assets and operations. A capital structure shows how various sources finance a business. It is the combination of long-term loans, bonds, retained earnings, equity along with other sources of funds.

Issuing more shares affects the composition of the capital structure. It adds to the percentage of capital financed by equity. Issuing shares increases the number of shareholders. Therefore, it is a capital structure decision.