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Capital Structure refers to the composition of a company's capital, which includes both equity and debt financing. It represents how a corporation finances its operations and growth by raising money from various sources. The structure can have a significant impact on a company's financial stability, profitability, and risk profile. It is an essential aspect of financial management in business as it involves making informed decisions about the mix of different types of capital, including common and preferred stock, bonds, and other forms of long-term debt. A well-designed capital structure can help a company optimize its cost of capital, manage risk, and enhance shareholder value.