explain capital structure in mind maps way

Expert Solution

Capital structure refers to the composition of the overall capital of a firm. In other words we can say that capital structure term means structure of whole finance of a firm.

As we know that total capital of a firm may be raised through various sources such as;

· Debentures

· Common stock

· Reatined earnings

· Bonds

· Treasury bills

· Long-term loans from financial institutions

· Preferred stock

· Public deposits

So structure of all above mentioned sources of funds is known as capital structure.

In other words we can say that capital structure will tell us about how required funds are raised by a firm is known as capital structure. Capital structure shows us the combination of various sources of funds or it tells us from which sources a firm have rasied required funds.

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