What are the advantages of capital structure?
A good capital structure ensures that the available funds are used effectively. It prevents over or under capitalisation. It helps the company in increasing its profits in the form of higher returns to stakeholders.
What are the disadvantages of capital structure?
Capital structure decision is concerned with the sources of long term funds such as debt and equity capital. Capital structure is defined as the mix of various long term sources of funds broadly classified as debt and equity. Hence capital structure is also referred to as 'Debt Equity Mix' of a company.
What are the decisions of capital structure?
The key factors influencing capital structure decisions to be investigated include industry leverage, profitability, firm size, growth opportunities, asset tangibility, expected inflation, and stock market return.