Capital Structure
“The composition or make-up of long term sources of fund such as equity, preference share, debentures and long term loans”. All these types of finance have to be in right proportion in order to ensure an optimum capital structure.
Essential features:-
Profitability: - It should results maximum profit top the company, for achieve this objective a proper policies of trading on equity should be followed.
Solvency: - it should be given on the basis of solvency of the company.
Flexibility: - Flexible enough to suit the changed conditio
Conservation: - Conservative in sense of that the debt capacity of the company should not be disturbed.
Control: - Sound capital structure should provide maximum control on equity share holders on company affairs.
Profitability: - It should results maximum profit top the company, for achieve this objective a proper policies of trading on equity should be followed.
Solvency: - it should be given on the basis of solvency of the company.
Flexibility: - Flexible enough to suit the changed conditio
Conservation: - Conservative in sense of that the debt capacity of the company should not be disturbed.
Control: - Sound capital structure should provide maximum control on equity share holders on company affairs.
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