How is "capital structure" defined?

The definition of "capital structure" refers specifically to the way a company finances its operations and growth using various sources of funding, primarily debt and equity. This combination is essential because it affects the risk and value of the company, determining how much of its financing comes from loans (debt) and how much comes from investors' contributions (equity). Understanding capital structure is crucial for businesses as it influences their financial strategy, cost of capital, and overall financial stability.

The other options do not capture the essence of capital structure. The management of assets pertains more to asset allocation or financial management rather than the specific mix of funding sources. Total revenue is a measure of a company's incoming cash flow and does not address how the company is financed. Finally, monetary policy relates to government actions that influence a country's economy, further distancing it from the concept of capital structure which is a corporate finance term.