The capital structure determinants in practice may involve considerations in addition to the concerns about earning per share, value of the company an....
The tax provisions provide for deduction of interest paid on debt and therefore the debt capital can increase the company’s after tax free cash flow....
Modigliani-Miller theorem (of Franco Modigliani, Merton Miller) forms the basis for modern thinking on capital structure. ....
The traditional view has emerged as a compromise to the extreme positions taken by the net income approach. ....
Net Operating Income or NOI is equal to yearly gross income less operating expenses. ....
The weighted average cost of capital (WACC) is used in finance to measure a firm’s cost of capital.....
Any company is said to have leveraged if it finances its assets through debt capital and equity capital. On the other hand, a company which finances i....
We know that there are two main sources of finance available for a company (or a firm) such as debt and equity. ....
A financial capital structure frame work can be structured and evaluated from various perspectives.....
The following are some important components of a company’s capital structure and they will therefore need proper analysis, consideration, evaluation....
Companies which do not plan their capital structure may prosper in the short run as they develop as a result of financial decisions taken by the manag....
Normally capital budgeting decisions are made for replacement of worn out or obsolete machineries.....
A company can raise the required finance through two principal sources, namely equity and debt.....
The combined effect of two leverages can be quite significant for the earnings available to ordinary shareholders. ....
High fixed costs and low variable costs provide the greater percentage change in profits both upward and downward. ....
The use of fixed charges (or interest) bearing sources of funds, such as debt and preference capital along with the owners’ equity in the capital st....
Any business or a company or firm requires capital to acquire assets. These assets could also be obtained with loans from financial institutions. ....
Cost of capital does not refer to the cost of some specific source in the financial decision-making. ....