This document discusses capital structuring and optimal capital structure. It begins by defining capital structure as the combination of different sources of finance used by a company. The objective is to maximize company value when determining capital structure. It then discusses factors that govern capital structure selection, including cost of capital, business risk, financial risk, control, and flexibility. The document defines optimal capital structure as the right mix of debt and equity that maximizes value. It concludes by defining over-capitalization as having more capital than needed and under-capitalization as having insufficient capital.