Question

what is the combination of debt and equity used by a company to finance its activities known as?
net present value
leverage
capital structure
portfolio theory

Explanation:

To solve this, we analyze each option:

• Net present value (NPV) calculates the value of future cash flows in present terms, not related to debt - equity combination.
• Leverage refers to using debt to finance assets, not the combination of debt and equity.
• Capital structure is defined as the combination of debt and equity a company uses to finance its activities.
• Portfolio theory deals with investment portfolios, not a company's financing mix.

Answer:

C. Capital structure