Tag Archives | Capital Structure

Calculation of Point of Indifference | Capital Structure

After reading this article you will learn about Calculation of Point of Indifference. The EPS, earnings per share, ‘equivalency point’ or ‘point of indifference’ refers to that EBIT, earnings before interest and tax, level at which EPS remains the same irrespective of different alternatives of debt-equity mix At this level of EBIT, the rate of […]

Capital Structure: Forms, Importance and Planning

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 […]

Calculation of Point of Indifference and Uncommitted Earnings

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 […]

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