capital structure

(redirected from Optimal capital structure)

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 ?
Eisai strive for an 'optimal dividend policy based on an optimal capital structure' that depends on long-term balance sheet management.
The major limitation of this study is rooted in the selection of five companies; therefore, the generalization of findings needs to be taken with precaution.While making any recommendations regarding the selection of optimal capital structure, there is a need to acknowledge that no readymade solution is available that could be used to develop optimal capital structure, however, effective financial strategies could be devised to workout optimal capital structure informed by real scenario.
"The new USD125 million convertible bond enables Petropavlovsk to maintain an optimal capital structure by refinancing the existing short-term USD100m convertible bond with a coupon of 9%, using a long-dated instrument and at a lower cost."
As we have previously stated, the company is focused on strengthening our operational and financial performance, developing a strategy to drive long-term revenue, profit, and cash flow growth, and is assessing a variety of options to reduce leverage to achieve a more optimal capital structure for the company," Maxar said, according to Reuters.
Cook also briefly talked about Apple's repurchase program, which has a slew of benefits like earnings accretion, dividend savings, and getting closer to an optimal capital structure. Buffett has always been a big fan of Apple's buyback program and has given input to Cook over the years.
Fitch believes eBay is continuing to assess its optimal capital structure in the current operating environment and could continue to maintain some level of gross debt on its balance sheet to maximize return on capital while retaining financial flexibility.
According to this theory, there is a possibility of optimal capital structure which can be achieved by a trade-off between cost and benefits of debt.
An optimal capital structure would represent that combination of the funding sources, such as debt and equity, which minimizes the firm's overall cost of capital, and by extension the value of the firm.
Improving the flexibility of our balance sheet, through increased cash flow and reduced gearing, and managing an optimal capital structure will be a key focus ahead.
Furthermore, we cooperate with third-party financial and legal advisors to identify the fair price range of opportunities, optimal capital structure, financing means, negotiations and most importantly, identifying catalyst factors to maximise shareholder value.
This study of Pakistani firms can help us understand the relevance of capital structure theories in a developing market, trying to answer the following questions (i) Do firms in Pakistan borrow to maintain an optimal capital structure? (ii) Do the firms in Pakistan borrow when internally generated financing is not enough to meet their planned expansion needs?
The two hybrid capital instruments enable TF Bank to finance the expected future growth through an optimal capital structure, it added.

Full browser ?