The extent to which an entity funds its operations through debt or equity is disregarded as highly significant only by investors.Select one:TrueFalse

The statement is asserting that the way an entity finances its operations—whether through debt (borrowed capital) or equity (owner's shares)—is considered significant only by investors.

Analysis:

• Investors often pay close attention to a company's capital structure, as it affects the risk and return profile of their investments.
• However, other stakeholders, including creditors, management, and analysts, also regard capital structure as significant. Creditors may assess a company's debt levels to determine creditworthiness, while management needs to consider capital structure for strategic planning and operations.

Therefore, the assertion that only investors consider the extent of funding through debt or equity to be significant is misleading.

Final Answer

False. The extent to which an entity funds its operations through debt or equity is significant to various stakeholders, not just investors.