BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The meaning of Capital structure can be described as the arrangement of capital by using different sources of long term funds which consists of two broad types, equity and debt. The different types of funds that are raised by a firm include preference shares, equity shares, retained earnings, long-term loans etc.

Detailed explanation-2: -Capital structure describes the mix of a firm’s long-term capital, which is a combination of debt and equity. Capital structure is a type of funding that supports a company’s growth and related assets. Sometimes it’s referred to as capitalization structure or simply capitalization.

Detailed explanation-3: -Long-term finance can be defined as any financial instrument with maturity exceeding one year (such as bank loans, bonds, leasing and other forms of debt finance), and public and private equity instruments.

Detailed explanation-4: -The long-term debt to capitalization ratio, a variation of the traditional debt-to-equity (D/E) ratio, shows the financial leverage of a firm. It is calculated by dividing long-term debt by total available capital (long-term debt, preferred stock, and common stock).

Detailed explanation-5: -Capital structure can be a mixture of a company’s long-term debt, short-term debt, common stock, and preferred stock. A company’s proportion of short-term debt versus long-term debt is considered when analyzing its capital structure.