Question

What is meant by capital structure? What are the major determinants of capital structure

Answer 1

Capital structure refers to the way a firm chooses to finance its assets and investments through some combination of equity, debt, or internal funds. If the assets financed by debt yield a return greater than the cost of the debt, the earnings per share will increase without an increase in the owners' investment.

Answer 2

Hello !

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.

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