As a broad definition, we can say that the debt and equity mix is called the capital structure of a firm. Because the capital structure determines the value of the firm, a target capital structure is tried to be maintained for shareholders’ wealth maximization, nevertheless, the actual portions of debt and equity financing alter over time. Assessing the target capital structure requires an appraisal of the financing sources, the evaluation of their risk, the examination of the maturity-cost relation of debt and the estimation of the cost of equity for different capital budget amounts. The correct answer is D.