Capital Structure, as the name suggests, means arranging capital from various sources in order to meet the need for long-term funds for the business.… Read Article
When a business seeks funds through investors, it considers two options: debt vs equity. Debt financing involves borrowing funds from investors by issuing corporate… Read Article
Trading on Equity is a financial process that involves taking more debt to boost the return of the shareholders. Trading on Equity occurs when… Read Article
Need for Capital Structure AnalysisYou may have heard that the ultimate goal of any organization is to maximize the wealth of the shareholders by… Read Article
Pecking order theory is a theory related to capital structure. Donaldson initially suggested it. In 1984, Myers and Majluf modified the theory and made… Read Article
Capital Structure in GeneralEvery company needs capital to support its operations. Capital structure is a blend of various sources of finance. To be more… Read Article
The difference between the net income and operating income approach of capital structure is mainly due to the role of capital structure, the cost… Read Article
The Modigliani and Miller approach to capital theory, devised in the 1950s, advocates the capital structure irrelevancy theory. This suggests that the valuation of… Read Article