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Current Issues In Finance
Finance & Accounting
Pages 10 (2510 words)
Current Issues in Finance Table of Contents Introduction 3 Description of Capital Structure 4 Critical Evaluation/Review 6 Theoretical Support to Evaluation/ Review 9 Conclusion 11 References 12 Introduction Capital structure represents the mix of debts and equities in raising the wealth required for the effective execution of a particular business process…
According to the theory of capital structure, the major features of the conception constitute with maximum return with minimum risk, flexibility in resource allocation, adequate liquidity, conservation of reserves, balanced capital flow and leverage, which accumulatively helps in assisting the smooth flow of finances stimulating the overall business operations. It is in this context that according to the theorem presented by Modigliani & Miller, there are various factors on which the managerial decision of configuring an appropriate capital structure is depended (Kumar & Sharma, 1998). The objective of this paper is to discuss about the importance of capital structure with reference to the financial configuration of a Hong Kong based real estate company named Henderson Land Development Company Pvt. Ltd. With this concern, the paper will also attempt to examine the utilisation and importance of capital structure from a generalised points of view narrowing towards its implications on the company. Modigliani & Miller’s theorem towards capital structure will also be taken into account for the purpose of this study. ...
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