The document discusses capital structure, which refers to the proportion of long-term financing sources like debt and equity that a company uses. A company's capital structure should aim to minimize costs and risks. It should maximize the company's value, returns, and flexibility while maintaining management control and fully utilizing available funds. The capital structure is different from but related to a company's capitalization, which refers to the total amount of securities issued, and its financial structure, which encompasses all liabilities. When determining capital structure, companies should understand how financing alternatives affect earnings per share through their impact on earnings before interest and taxes.