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Fundamental
Capital Structure
Mix of debt and equity financing
Definition
Capital structure refers to the proportion of debt and equity used to finance a company's operations and growth. Optimal capital structure balances tax benefits of debt with financial risk. Modigliani-Miller theorem suggests capital structure shouldn't affect firm value under perfect market assumptions.
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#financing
#debt
#equity
#optimal capital structure
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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