Corporate Governance

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

Capital Structure refers to the composition of a company's capital, which includes both debt and equity financing. It represents how a corporation finances its operations and growth by using different sources of funds, such as common stock, preferred stock, bonds, and loans. The proportion of each type of capital in the structure can significantly impact a company's financial stability, profitability, and risk level. Effective management of capital structure is crucial for businesses to optimize their cost of capital, maintain financial flexibility, and enhance shareholder value.

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