A company should select the capital structure that maximizes the company's value.
A company's capital structure refers to its decisions regarding the upkeep of financing.
- Company size and maturity determines capital structure.
- The capital used for financing a business is referred to as its capital structure.
- Shareholder's equity, debt, and preferred stock are all included in the balance sheet that is finally drawn up under the capital structure of a company.
- Capital structure enumerates the funds that help the company operate, hence its importance for the company.
- To maximize the company's value it becomes increasingly important for the company to select an ideal capital structure.
Therefore, a company should select the capital structure that maximizes the company's value.
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