ESSENTIAL FEATURES OF A SOUND CAPITAL MIX
A sound or an appropriate Capital structure should have the following essential features :
- highest possible use of leverage
- Capital structure should be flexible
- To avoid undue financial/business risk with the increase of debt
- The use of debt should be within the capacity of a firm. The firm should be in a position to meet its obligations in paying the loan and interest charges as and when due.
- It should involve smallest amount of possible risk of loss of control
- It must avoid undue restrictions in agreement of debt