The term 'Capital Structure' refers to the proportion between the various long-term sources of finance in the total capital of the firm. The major sources of long-term finance include 'Proprietor's Funds' and 'Borrowed Funds'. "Capital structure is the makeup of a firm's capitalization i.e. it represents the mix of different sources of long term funds in the total capitalization of [...]
Everything you need to know about the theories of capital structure. Capital structure theories seek to explain the relationship between capital structure decision and the market value of the firm. There are conflicting opinions regarding whether or not capital structure decision (or leverage or proportion of debt and equity) affects the value of the firm (or shareholder's wealth). There is [...]
Everything you need to know about the Types of Leverages as studied in Financial Management! Leverage is of three types: 1. Operating Leverage, 2. Financial Leverage, and 3. Combined Leverage. Types of Leverages as Studied in Financial Management Types of Leverages - Financial, Operating and Combined Leverages (with Formula) Type # 1. Financial Leverage: Financial Leverage is a tool with [...]