Question

Explain how limited liability may affect the capital structure decisions of a corporation.

Answer 1

Explanation:

The higher the debt ratio the greater the use of debt for financing operations vis-a-vis equity financing. Depending on your company and the industry you operate in a financial manager has to determine what level of debt is good for your capital structure.

Answer 2

Answer:

The higher the debt ratio the use of debt in financing operations vis a Vis equality financing.