Essential features of a sound capital mix, Financial Management

Assignment Help:

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

Related Discussions:- Essential features of a sound capital mix

Define working capital, Q. Define Working Capital. Ans. Introduction: - ...

Q. Define Working Capital. Ans. Introduction: - Working capital plays the similar role in the business as the role of heart in the human body. Just like heart gets blood as well

Explain in brief about financial management, Explain in brief about Financi...

Explain in brief about Financial management These tools help the manager to figure out which sources offer the lowest cost offunds and which activities will provide the greates

Dividend yield method, Dividend yield method As per this method, the co...

Dividend yield method As per this method, the cost of Equity capital is the discount rate that equates the present value of expected future dividends per share with the net pro

Definition of capital budgeting, Q. Definition of Capital Budgeting? Ca...

Q. Definition of Capital Budgeting? Capital Budgeting is the procedure of making decisions for investment in long-term assets. It is a method of deciding whether or not to inve

Forms of liquidity, Forms of Liquidity: Definition: Liquidity defines ...

Forms of Liquidity: Definition: Liquidity defines to how quickly and cheaply an asset will be converted into cash. Money (in the form of cash) is the most liquid asset. Assets

Multicollinearity, Multicollinearity As the degree of correlation betwe...

Multicollinearity As the degree of correlation between the independent variables increases, the regression coefficients become less reliable. That is, although the independent

Why does money have time value, Why does money have time value? Positiv...

Why does money have time value? Positive interest rates point toward that money has time value.  When one person lets one more borrow money, the first person needs compensation

Cash flow valuation technique, Cash Flow Valuation Technique The aim o...

Cash Flow Valuation Technique The aim of this research is to empirically enquire into how to value a company using discounted cash flow valuation technique within its real lif

Define primary reserves of a bank, What are a bank's primary reserves? When...

What are a bank's primary reserves? When the Fed sets reserve requirements, what is its primary goal? Vault cash and deposits in the bank's account at the Fed are employed to s

Balance sheets, Balance Sheets   Peony Ltd. ...

Balance Sheets   Peony Ltd. Aster Ltd. Assets:     Cash $     62,500 $

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd