Your SlideShare is downloading. ×
0
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Capital structur 18sep2012
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Capital structur 18sep2012

593

Published on

this is made by devendra ojha and give presentation in govt college aron

this is made by devendra ojha and give presentation in govt college aron

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
593
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
33
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Capital StructurePresented by Devendra ojha BBA v semMail-id ojhad25@gmail.com
  • 2. OutlineMeaning of Capital StructureSource of capitalCapital structure of multinational firmsFour main capital structure theories
  • 3. Meaning of Capital StructureCapital Structure refers to the combination or mix of debt and equity which a company uses to finance its long term operations.
  • 4. Source of Capital
  • 5. CAPITAL STRUCTURE OFMULTINATIONAL FIRMSCapital structure for the multinational firm involves a choice between debt and equity financing across all its subsidiaries. A MNC can have more debt in its capital structure if its cash flows are more stable and it has a low credit risk.
  • 6. Four main capital structure theories Net income approach Net operating income approach Traditional approach Modigliani and miller approach
  • 7. Net income approach This approach being propounded by durand The cost of debt is lower than the cost of equity The risk perception of investors is not changed by the use of debt. There are no tax.
  • 8. Net operating income approach This approach also propounded by durand The cost of debt is lower than the cost of equity Cost of debt are constant If we increase proportion of debt capital than overall cost of capital decrease but same time interest burden on company increase These are no corporate tax .
  • 9. Traditional approach increase in leverage does not affect the overall cost of capital and the value of the firm Higher demanding of return Point of Optimum capital structure
  • 10. Modigliani- miller approach Feature1. Capital markets are perfect2. Homogeneous risk classes of firm3. Expectations about the net operating income4. Dividend payout ratio 100%5. No corporate taxes

×