Answer:
One of the primary assumptions of capital structure analysis is that the level and variability of debt is not expected to change as changes in capital structure are contemplated.
a. debt
Step-by-step explanation:
Capital structure analysis defines a blend of a company's long-term capital. The long-term capital in this case includes the firm's debt and equity. Capital structure is a financing model that supports growth. It can be expressed using the formula below;
CS=DO+TSE
where;
CS=capital structure
DO=debt obligations
TSE=total shareholder's equity
Total shareholder's equity
The total share holders equity can be determine using the expression;
TSE=Cs+Ps+Re
where;
Cs=common stock
Ps=preferred stock
Re=retained earning
The total share holders equity form part of the capital that has been invested.
Debt
A discussion of what debt should entail is a little complicated compared to the shareholder's equity. The level and variability of the debt is usually assumed to be constant as changes in capital structure are contemplated.