Conclusion of Capital Structure
To be profitable businesses needs capital to operate and. The capital structure decision can affect the value of the firm either by changing the expected earnings or the cost of capital or both. Sign In For most of the firms the decision involves a choice between the long-term debt and the equity. . In 1958 through combining tax and debt factors in a simple model to price the value of a company Modigliani and Miller firstly begin to explore a modern capital structure theory and their work. Capital structure is an important term to understand especially for those who want to advance their business careers and for financial analysts. Simply speaking capital structure mainly contains two elements debt and equity. Capital structure is a type of funding that supports a companys growth and related assets. Capital is a resource that all businesses need to operate Capital can be raised through debt or equity financing or by holdin...