Essential features of a sound capital mix, Financial Management

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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

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