Capital structure definition, Financial Management

CAPITAL STRUCTURE DEFINITION

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







Related Discussions:- Capital structure definition, Assignment Help, Ask Question on Capital structure definition, Get Answer, Expert's Help, Capital structure definition Discussions

Write discussion on Capital structure definition
Your posts are moderated
Related Questions
How can we measure the Present Value When we solve for present value, rather than compounding the cash flows to the future, we discount future cash flows to present value to ma

Implants and implant systems since inception have been in continuous state of flux in terms of its design and surface. Likewise there has been a subtle change in the implant surgic


what is the annual tax shield to a firm that has total assets of $80 million and a net worth of $55 million,if the average interest rate on debt is 8.5% and the marginal tax rate i

Fundamental ingredients of Management of working capital Management of working capital has two fundamental ingredients: (1) an overview of working capital management as a wh

Q. Show the Disadvantages of adjusted discount rate? (1) The risk premium rates resolute under this method are arbitrary. Therefore this method mayn't give objective results.

Calculation of weighted average cost of capital (WACC) Market values Market value of equity = 5m × 4.50 = $22.5 million Market value of preference shares = 2.5m × .0762 =

Question 1: i) What is meant by Cost and Benefit Analysis? Illustrate your answer with the use of empirical and hypothetical examples. ii) What are the benefits of conductin

Putable bonds can be redeemed prior to maturity at the initiative of the bondholder. These bonds are more advantageous to the investors as they get an opportunity to re

How does accounts receivable factoring work?  What are the benefits to the two parties involved?  What are the risks? Factoring is when one firm trade accounts receivable (AR)