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What do you understand about the Theory of Capital Structure?
Theories relevant to Capital structure relate the capital structure with valuation and cost of the capital. Decision related to Capital structure can influence the importance of a firm either by varying expected cost or expected earning or both of them. On the various assumptions theories are created and the complete capital structure along with various conditions follows these theories. There are four main theories as- Net Income approach, NOI approach, Modigliani and Miller Approach and Traditional Approach.
Our Theory of Capital Structure Assignment Help team explains that Capital structure means some debts taken by a company for its growth. These debts are long term and short term. Preferred equity and common equity are also important. Along with that, some important funds are used to finance its whole operations. Each theory describes some important relation between the terms for evaluation and processing firms in an appropriate way. Thus, you need to have perfect knowledge of different terms for completing your assignment in a proper way.
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