--%>

Common factors influencing capital structure

Write down the common factors influencing capital structure?

E

Expert

Verified

The common factors which are influencing the capital structure are illustrated below :-

1) Company constitution : In companies capital structure is extremely significant as many companies treat it as a dissimilar entity. Private companies considers control factor as significant whereas public company finds cost factor more significant.

2) Company characteristics : Characteristic of the company that explain its infrastructure as age, size and credit plays pivotal role in deciding the capital structure. Slighter or newly started companies depend more on equity capital as they can do limited bargaining. Large companies or having good credit companies are in the place to get funds from the source of their selection.

3) Stability of Earnings : Fluctuations takes place if the earnings and sales of the company are not secure enough over an era of time. Stable company can get the risk.

4) Attitude of the Management : Attitude performs a significant role as if the attitude is conventional then control factor gets the significance and if it is liberal then cost factor gets significant.

   Related Questions in Business Economics

  • Q : Reducing output of other good When the

    When the production possibilities frontier in a proficient economy is not growing, raising the output of one good always needs: (i) Increasing the output price for the other good. (ii) Bigger amounts of resources. (iii) Decreasing the output of other

  • Q : What is the basic principle of

    What is the basic principle of comparative advantage?

  • Q : Problem regarding supplies-demands and

    The new supply and demand curves within University City are S0 and D0. But after the county commission imposed a $3 per six-pack excise tax upon beer: (1) demand fell to D1 from the perspectives of beer dealers. (2) co

  • Q : Competition and the Invisible Hand

    Elucidate: Competition and the “Invisible Hand”?

  • Q : Why businesses are not really free to

    Why businesses are not really “free” to produce what they wish?

  • Q : Speculators decreases price volatility

    Speculators decrease price volatility through, in effect, changing demand curves: (w) out at low prices, and shifting supply curves out at high prices. (x) out at low prices, and shifting supply curves within at low p

  • Q : Define the ability of goods by wealth

    According to Adam Smith nation's wealth is, not the gold this possesses, but somewhat it’s: (1) number of people. (2) capability to give goods for its people. (3) foreign investments. (4) domestic financial capital. (5) militar

  • Q : Describe GDP gap and Okun’s Law

    Describe GDP gap and Okun’s Law?

  • Q : Main advantage of EVA The main

    The main advantage of using EVA is that it is simple to calculate and understand. It uses simple measures like operating profits and cost of capital terms which are widely known and accepted in the financial arena. It helps the managers to assess thei

  • Q : Reciprocal Trade Agreements Act had

    How Reciprocal Trade Agreements Act had goal of reducing tariffs?