Corporate Governance

Definition of Corporate Governance as it relates to Business, Financial Management, Investment Management

Capital structure refers to the composition of a company's capital, which includes both equity and debt financing. It represents the proportion of different sources of funds used by a business to finance its operations and growth. The capital structure is an essential aspect of financial management as it affects a company's cost of capital, risk profile, and financial flexibility. In investment management, understanding a company's capital structure is crucial in evaluating its financial health and potential for returns. A well-managed capital structure can enhance a company's value, while a poorly managed one can lead to financial distress and bankruptcy. Therefore, capital structure is an integral part of business and financial management, requiring careful consideration and strategic planning.

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