Capital structure definition, Financial Management


According to Gerstenberg, Capital structure refers to 'the makeup of a firm's capitalisation'.  In other way, it signifies the mix of different sources of long term funds (like preference shares, equity shares, long term loans, and retained earnings).

Optional Capital Structure may be described as that of Capital structure or Combination of debt and equity that leads to the greatest value of the firm.

Capital structure planning intends at maximization of profits and the wealth of the shareholders, ensures the maximum value of a firm or minimum Cost of capital.

Posted Date: 10/16/2012 1:14:35 AM | Location : United States

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