capital structure

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Capital structure

The makeup of the liabilities and stockholders' equity side of the balance sheet, especially the ratio of debt to equity and the mixture of short and long maturities.

Capital Structure

How a company finances its operations. The three most basic ways to finance are through debt, equity (or the issue of stock), and, for a small business, personal savings. Capital structure usually refers to how much of each type of financing a company holds as a percentage of all its financing. Generally speaking, a company with a high level of debt compared to equity is thought to carry higher risk, though some analysts do not believe that capital structure matters to risk or profitability.

capital structure

capital structure

the composition of a JOINT-STOCK COMPANY'S long-term capital which reflects the source of that capital, for example SHARE CAPITAL and long-term LOAN CAPITAL. See CAPITAL GEARING.

capital structure

See capital stack.
References in periodicals archive ?
However, extended investigations of capital structure theory have not provided answers.
Awan and Amin (2014) investigate which factors affect which of 68 textile firms of Pakistan listed on Karachi Stock Exchange during 2006-2012 and which type of capital structure theory does more prevail in textile sector of Pakistan.
Knowledge of capital structure theory and practice is important in stock repurchase programs.
In this study, we examine the capital structures of firms that emerge from the Chapter 11 reorganization process to ascertain whether the capital structures: 1) are completely reset according to capital structure theory, 2) stem from Kahl's (2002) dynamic theory of controlled liquidation, and/or 3) reflect inefficiencies and other characteristics of the Chapter 11 process.
Because there may exist more than one proxy for the latent attributes specified by capital structure theory as determinants of capital structure, equation (6) implies that these proxies can be expressed as linear function of one or more latent attributes plus a random measurement error.
While coverage of traditional capital structure theory and analysis is included, the main focus is on the analysis of what companies do in practice.
This essay analyzes the theoretical evidence for the capital structure theory.
Capital structure theory as put forth by Modigliani and Miller (1958) asserts that firms select a capital structure that minimizes their weighted average cost of capital.
By 1989, Myron Gordon of the University of Toronto cited 48 articles and books that challenged the MM capital structure theory.
They then offer a new capital structure theory that captures the unique features of REITs, and they identify factors which differentiate apartment REITs.