The terms, capitalization, capital structure and financial structure, do not mean the same. While capitalisation is a quantitative aspect of the financial planning of an enterprise, capital structure is concerned with the qualitative aspect. Capitalisation refers to the total amount of securities issued by a company while capital structure refers to the kinds of securities and the proportionate amounts that [...]
After reading this article you will learn about Capital Structure:- 1. Forms of Capital Structure 2. Importance of Capital Structure 3. Planning. Forms of Capital Structure: The capital structure of a new company may consist of any of the following forms: (a) Equity Shares only (b) Equity and Preferences Shares (c) Equity Shares and Debentures (d) Equity Shares, Preferences Shares [...]
After reading this article you will learn about the Calculation of Point of Indifference and Uncommitted Earnings per Share. Point of indifference refers to that EBIT level at which earnings per share (EPS) remains the same irrespective of different alternatives of debt-equity mix. While calculating the equivalency point, the provision for repayment of debt or obligation towards sinking fund has [...]