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Questions
What is meant by capital structure?
What is capital structure?
Short Answer
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Solution
Capital structure is the proportion of debt and equity used for financing business operations. It represents the proportion of debt capital and equity capital in the capital structure. It is not easy to define the best capital structure for a firm. It should increase the value of the equity share or maximize the wealth of the equity shareholders.
`"Capital Structure" = "Dept"/"Equity"`
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