Meaning
Capital Structure defines how a company finances its business operations.Definition
It is the specific mix of a company’s long-term debt, common equity, and preferred equity used to fund its assets and growth.Key Components
The main components are debt (like loans and bonds) and equity (such as shares and retained earnings).Influencing Factors and Importance
Influenced by factors like interest rates, market conditions, and business risk. An optimal capital structure is crucial for minimizing the cost of capital and maximizing shareholder wealth.Author
