It is the strategic combination of debt and equity of a company in financing and raising capital for its overall operations. Trade Credit false Capital Investment false Capital  false Capital Structure true Single These are constant costs incurred regardless of the level of production. Fixed costs true Total costs false Cost price false Cost of goods false Single It is the risk that is inherent in the company’s operation if it has no debt. Foreign risk false Business risk true Risk-return tradeoff false Inherent risk false Single It refers to how prepared the business is to sudden changes in cash flows. Short-term flexibility false Increased flexibility false Financial flexibility true Flexibility  false Single It means that the company has a higher debt capacity and the ability to pay off any long-term obligations. Long-term flexibility false Increased flexibility true Short-term flexibility false Financial flexibility false Single It is considered the cheapest form of financing because payments are tax deductible, pre-determined and fixed through a certain period. Shares false Equity  false Trade credit false Debt  true Single It is the extent to which debt and preferred stocks are used in the capital structure of the company. Short-term flexibility false Long-term flexibility false Financial leverage true Increased flexibility false Single It is measured using the current ratio and acid test ratio. Short term flexibility true Long term flexibility false Financial flexibility false Increased flexibility false Single These are the next cheaper source of finance, next to debt. Equity false Sales ownership false Ordinary shares false Preferred shares true Single It is the extent to which fixed costs are used in a business. Financial Leverage false Operating Leverage true Fixed Costs false Cost Price Variability false Single