Essential features of a sound capital mix, Financial Management

Assignment Help:

ESSENTIAL FEATURES OF A SOUND CAPITAL MIX

A sound or an appropriate Capital structure should have the following essential features :

highest possible use of leverage
Capital structure should be flexible
To avoid undue financial/business risk with the increase of debt
The use of debt should be within the capacity of a firm. The firm should be in a position to meet its obligations in paying the loan and interest charges as and when due.
It should involve smallest amount of possible risk of loss of control
It must avoid undue restrictions in agreement of debt

Related Discussions:- Essential features of a sound capital mix

Explain how price serve as a signal to resource owners, How does price serv...

How does price serve as a signal to resource owners? While consumers decide that a good or service is much more appealing than before, demand rises. This makes a shortage at the

Explain about receivables management, Q. Explain about receivables manageme...

Q. Explain about receivables management? Receivable Management: - The term receivables demote to debt owed to the firm by the customers resulting from sale of goods or else ser

Calculate the risk premium and probabilities , Johnson & Johnson (JNJ) is t...

Johnson & Johnson (JNJ) is trading at 68.15 (Sep 12th 2012 close). JNJ is a large health care conglomerate. It has done well so far this year (though not as well as the market) and

What is meaning of perpetuity, What is meaning of Perpetuity If annuity...

What is meaning of Perpetuity If annuity is expected to go on forever then it is known as a perpetuity and then the above formula reduces to: Present value: A/i Perpetuit

Explain the concept of newsworthiness in the field of pr, Question 1: (...

Question 1: (a). A big multinational company wishes to employ a PR manager for all its PR activities. What according to you would be the advantages and disadvantages of having

Explain the concept of the world beta of a security, Explain the concept of...

Explain the concept of the world beta of a security. Answer: The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is

Explain about the internal controls of benchmarking, Explain about the Inte...

Explain about the Internal controls of benchmarking "Comprises control environment and control procedures. It includes all the procedures (internal contr

Cost-volume-profit analysis, Cost-Volume-Profit Analysis The Cost-Volum...

Cost-Volume-Profit Analysis The Cost-Volume-Profit (CVP) analysis provides answers to vital questions such as: At what sales volume would the firm break-even? How sensitive is

Operating cycle, Define operating cycle and long and short operating cycle?...

Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??

What is functional benchmarking, Best practice or functional benchmarking ...

Best practice or functional benchmarking Compare an internal function to 'the best' however not necessarily an organisation in same industry for example compare administrati

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages