Definition - What does Capital Structure mean?
Capital structure is commonly known as the debt-to-equity ratio.
Divestopedia explains Capital Structure
Debt takes the form of a corporate bond issue, long-term loan, or short-term debt. The latter directly impacts the working capital. Having said that, a company that is 70% debt-financed and 30% equity-financed has a debt-to-equity ratio of 70%; this is the leverage. It is very important for a company to manage its debt and equity financing because a favorable ratio will be attractive to potential investors in the business.
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