What is capital structure? What are the principles of capital structure management?



What is capital structure? What are the principles of capital structure management?..

Answer / Bhoopendra Kumar Bhaskar

Capital Structure refers to the mix of various types of capital (equity, debt, preferred stock) that a company uses to finance its operations. The principles of capital structure management involve balancing the trade-offs between risk and return, minimizing financial distress, maintaining financial flexibility, and optimizing tax shields.

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