Everything you need to know about the factors affecting capital structure decisions of a company. The capital structure of a company is a particular combination of debt, equity and other sources of finance that it uses to fund its long-term asset. The key division in capital structure is between debt and equity, the proportion of debt funding is measured by [...]
In this article we will discuss about the capital structure and value of firm. Meaning and Definition of Capital Structure and Value of Firm: A firm mobilizes funds which, depending upon their maturity period, can be classified as long-term and short-term sources. The former consists of capital, reserves and term loans raised from public and financial institutions, while the latter [...]
After reading this article you will learn about Calculation of Point of Indifference. The EPS, earnings per share, 'equivalency point' or 'point of indifference' refers to that EBIT, earnings before interest and tax, level at which EPS remains the same irrespective of different alternatives of debt-equity mix At this level of EBIT, the rate of return on capital employed is [...]