define ''capital structure''
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Answers
Answer:
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Explanation:
The capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings.
A company can raise its capital from different sources that is, owned capital or borrowed capital or may be both.
The owned capital consist of Equity Share capital, Preference Share capital, reserved and surplus.
Where as, the borrowed capital consist, debenture, creditors, loans etc.
A combination of different sources are used in capital structure. It's nothing but "security mix"
Thus, Capital Structure means "mix up of various sources of funds in desired proportion".
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