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प्रश्न
Explain the following as factors affecting the choice of capital structure:
Flexibility
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उत्तर
Flexibility: A firm’s capacity to borrow in the future is restricted because of excess debt. Therefore, a certain amount of borrowing is extended to meet unexpected situations to maintain flexibility.
More use of debt in present ⇒ Ability to use in future decreases
Balance should be maintained between debt and equity in the capital structure.
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