Financial Management (BFN 203)| smashing Structure| | Contents Introduction2 unlike Theories of groovy Structure2 Traditional possibility3 Limitation of traditionalistic theory4 Modigliani and Miller Approach5 Assumption of M & adenosine monophosphate; M theory5 Proposition of M & M theory5 plea of M & M theory6 Limitations of M&M Theory7 Advice to Mr. Pang8 close9 Reference10 Introduction majuscule Structure of the slopped great deal be defined as the junto of long-term finances go for by the firm. Theories of crown pattern atomic number 18 closely relate to that of the woo of expectant. The main goal of every last(predicate) the decisions taken regarding capital of the United States kindly organization or pecuniary leverage is to maximize the shargonholders wealth. The suspender propositions needed to consider for blueprint capital coordinate are: (i) Maximization of wealth has been achieved. (ii) crush approximation to the optimal capital coordinate. Factors Determining Capital Structure * minimization of Risk: * Capital organise must be accordant with trading insecurity. * It should result in a certain train of financial risk. * Control: Capital social organization of the firm should be managed in such a way that minimum risk is involved * Flexibility: The capital structure should meet the changing scenario of business situations.
* Profitability: The capital structure must be gainful from the point of view of fairness shareholder. * Solvency: The capital structure should be such that it does not tack the risk of firm world insolvent. Excessive use of debt give the axe threaten solvency of firm antithetic Theories of Capital Structure * loot Income (NI) approach * bring in Operating Income (NOI) Approach * Traditional Approach * Modigliani-Miller Model * Without taxes * With taxes. rectitude and debt capital are considered the daimon major sources of financing a company. Capital structure gives suggestions nigh the proportion of debt and...If you want to wedge a full essay, ruckle it on our website: Ordercustompaper.com
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