OPTIMUM CAPITAL STRUCTURE AND ITS FEATURES
OPTIMUM CAPITAL STRUCTURE AND ITS FEATURES (#) Capital Structure ------> " Capital Structure is qualitative term that gives the ratio in which the total capital is contributed by different sources" * Capital Structure may be high geared or low geared * Capital Structure influenced by external factors . * Capital Structure is a proportion of debts and equity in the total capital of a company. -- Debts such as all borrowings from government , semi government and other agencies , loan from bank , debenture , etc . -- Equity such as equity share capital , Preferential share capital , contingency reserve , surplus profit and other . * Capital Structure denotes mix of owners' funds and outsider's fund (#) Optimum capital structure Optimum capital structure is the best debt-to-equity ratio for a firm that minimizes the firm's cost of capital. - Debt financing generally offers the lowest cost of capital. - Since