Factors determining the optimum capital structure include:a.Business risk and financial riskb.Market risk and liquidity riskc.Operational risk and credit riskd.Economic risk and political risk

The factors that determine the optimum capital structure of a company are mainly:

a. Business risk and financial risk: Business risk is the risk associated with the company's operations. It can be influenced by numerous factors, such as competition, market demand, and operational efficiency. Financial risk, on the other hand, is the risk associated with the company's financial structure and decisions, particularly the debt level.

b. Market risk and liquidity risk: Market risk is the risk of losses in positions arising from movements in market prices. Liquidity risk is the risk that a company may not be able to meet short term financial demands. This usually occurs due to the inability to convert a security or hard asset to cash without a loss of capital and/or income in the process.

c. Operational risk and credit risk: Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments.

d. Economic risk and political risk: Economic risk is the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country. Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a country.

In conclusion, all these factors play a crucial role in determining the optimum capital structure of a company. The optimum capital structure is achieved when the cost of capital is minimized, that is, the value of the firm is maximized.