capital structure

What are the Components of Capital Structure?

The two primary components of capital structure are:
Equity Capital: This includes funds raised by issuing shares of stock. Equity capital is advantageous because it doesn’t require fixed payments. However, it may dilute existing shareholders' ownership.
Debt Capital: This involves borrowing funds through loans, bonds, or other debt instruments. Debt capital is typically cheaper than equity but increases the company's financial risk due to fixed interest obligations.

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