Introduction of the term capital structure

Question

Give brief introduction of the term capital structure? And also write down its principles?

Answer 1

Capital structure is a word that is referred to be the mix of sources from that the long term funds are needed for business purposes that are raised to get better the capital of the company. To fund an organization strategy this capital structure is needed that is the amalgamation of debt and equity. The management makes sure the capital structure accesses that are needed to fund future enlargement and improve financial presentation. The principles of capital structure management that are effectively needed are illustrated below:-

i) Risk Principle

ii) Cost Principle

iii) Flexibility Principle

iv) Control Principle

v) Timing Principle