--%>

Common factors influencing capital structure

Write down the common factors influencing capital structure?

E

Expert

Verified

The common factors which are influencing the capital structure are illustrated below :-

1) Company constitution : In companies capital structure is extremely significant as many companies treat it as a dissimilar entity. Private companies considers control factor as significant whereas public company finds cost factor more significant.

2) Company characteristics : Characteristic of the company that explain its infrastructure as age, size and credit plays pivotal role in deciding the capital structure. Slighter or newly started companies depend more on equity capital as they can do limited bargaining. Large companies or having good credit companies are in the place to get funds from the source of their selection.

3) Stability of Earnings : Fluctuations takes place if the earnings and sales of the company are not secure enough over an era of time. Stable company can get the risk.

4) Attitude of the Management : Attitude performs a significant role as if the attitude is conventional then control factor gets the significance and if it is liberal then cost factor gets significant.

   Related Questions in Business Economics

  • Q : Key model of price-specie flow mechanism

    The key model underpinning David Hume’s price-specie flow mechanism which most mercantilists failed to grasp is termed today as: (i) the equimarginal principle. (ii) the wages-fund doctrine. (iii) the quantity theory of money. (iv) partial equil

  • Q : What are the 2 definitions of economics

    What are the 2 definitions of economics growth?

  • Q : Determine relative price when two

    When the prices for doughnuts and croissants are $.50 and $1 correspondingly: (w) the opportunity cost for one doughnut is two croissants. (x) this is better to buy two doughnuts than one croissant. (y) one croissant will make Pierre twice as happy as one doughnut. (z

  • Q : What is an Economic Territory Economic

    Economic Territory: This refers to the region of a country where there is a free movement of goods, capital and human resources.

  • Q : Demand supply with the aim of diagrams

    with the aim of diagrams show the difference between A change in demand and A change in quantity demand

  • Q : Circular flow model to confirm this

    Use the circular flow model to confirm this assertion for the construction of a new high school in Blackhawk county?

  • Q : Explain about the arbitrage except

    Not like speculation, there arbitrage is: (w) an activity which is generally more lucrative when conditions are favorable. (x) a profitable and relatively riskless activity. (y) the process of representing a domestic company within fo

  • Q : Impact of dollar on aspects of

    Question Discuss the impact of dollar depreciation on the various aspects of American Economy. Devaluation of the DollarIntroduction:

  • Q : Changing rates of Appreciation and

    Elucidate the changing rates of Appreciation and Depreciation?

  • Q : Explain how Entrepreneurs are

    Explain how Entrepreneurs are risk-takers?