What should be considered as best in the company's view
either debt or equity? Explain briefly?
Answer Posted / v.hemant kumar
Capital stucture of the company should be built up before
taking any decisions with regard to the ratio of debt &
equity of a company . For this purpose only there are
instruments like capital budgetting & deciding the cost of
capital & leverage analysis are used. However no company
exists without equity or debt. It also depends on the risk
taking factor of the company. IF the company is higly risky
it opts for more of debt & less risky option is debt
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