Talk:Capital structure

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Wiki Education Foundation-supported course assignment

This article was the subject of a Wiki Education Foundation-supported course assignment, between 26 May 2020 and 3 July 2020. Further details are available on the course page. Student editor(s): Jiayu Xu.

Above undated message substituted from Template:Dashboard.wikiedu.org assignment by PrimeBOT (talk) 16:43, 16 January 2022 (UTC)[reply]

?

the most buck for its bang

Is it not the other way?--Jerryseinfeld 09:55, 9 Jan 2005 (UTC)

cap-structure arb

I like the langauge a lot, the articles should contain more "buck for its bang", "screw up", "get out of here".--Jerryseinfeld 09:57, 9 Jan 2005 (UTC)

can any body help me understand the impact of capital structure on the market value of a firm —Preceding unsigned comment added by 82.128.123.2 (talk) 16:28, 1 February 2010 (UTC)[reply]

Capital Structure

What's the best way to determine your company's capital structure? —Preceding unsigned comment added by 24.168.98.179 (talk • contribs)

Do you mean calculating the existing structure? Or calculating what might be the optimal structure? Ewlyahoocom 17:19, 8 May 2006 (UTC)[reply]

Merged Capital structure theory here

This was all there was in "Capital structure theory If anybody want to put this back with any sense in it its fine with me. Smallbones 15:06, 15 April 2007 (UTC)[reply]

Enthusiasm for sophisticated analysis spread to other decision-making issues such as cash, inventory management and other important day-to-day decisions affecting the short- and long-term well-being of the firm. Capital structure theory, the study of the relative importance of debt and equity in influencing the firm's value, also began to receive analytical investigation.

J.B. Clark (1899) had a fundis view of capital, such that there was no time delay in production and that time only enters consideration when there is new capital investment. Capital is a fund of value:

-Investment is a flow variable -Capital is a stock variable

S.H. Frankel refutes Clark on the basis of capital being heterogeneous, time being important, and that legal institutions help discover the value of Mal-invested capital (i.e. mistakes happen...recessions happen).

unclear definition or unadressed trivial thing

what does financial structure mean, total debt / total asset, or long term debt / total asset? And if short term debt debt is included, then are account payables also included? Jackzhp (talk) 20:29, 26 March 2008 (UTC)[reply]

What on earth does this sentence mean (under the heading "Trade-Off Theory")?:

xxx It states that there is an advantage to financing with debt, the tax benefit of debt and there is a cost of financing with debt, the bankruptcy costs of debt. xxx  —Preceding unsigned comment added by Cgay88 (talk • contribs) 18:35, 22 April 2008 (UTC)[reply]

The popular use/mention error

The first sentence, as is still the case with many Wikipedia articles, assumes this article is about the words 'capital structure'. Which is an incorrect assumption.

I'm changing the first sentence from starting with 'In finance, capital structure refers to', so it instead says 'In finance, capital structure is'. And I encourage everyone to edit other article introductions where this somewhat tiresome mistake is discovered. --62.16.186.44 (talk) 15:50, 6 November 2015 (UTC)[reply]

Incorrect statement

Greetings Wikipedians! It looks like there has been no activity this talk page in over five years. Anyway, I deleted the statement "A firm's capital structure is the composition or structure of its liabilities" because it is technically incorrect. Equity is part of a firm's capital structure, but it is not a liability. This is evident in the basic accounting equation "Assets = liabilities plus equity," which I'm confident holds true in every industry despite the many differences in how companies structure their balance sheets. I've adjusted the first sentence in the article to correct this. This is part of a larger effort to improve the article by adding more citations to reliable sources and improve verifiability.Cordially, BuzzWeiser196 (talk) 11:36, 8 May 2021 (UTC)[reply]

Too academic

Most of the text is concerned with Miller/Modigliani and "relaxing assumptions" about their theory. How about some text about the practical issues financial executives and corporate board members wrestle with? Such as a) Finding the right capital structure for the business; b) risks involved in too much leverage; benefits swamped by investor concern over the company's risk profile; c) rating agencies' scrutiny of capital structure. These things should be presented as real-world problems, not just discussed in the framework of a theory that says capital structure makes no difference. Cordially, BuzzWeiser196 (talk)

Since writing the above message I have endeavored to expand the article with respect to the practical issues outlined above, with citations for verifiability. Seems to me there's still undue space devoted to the Miller/Modigliani and related schools of thought, but I guess the academic side of this is important to someone so I left those sections intact. BuzzWeiser196 (talk) 14:32, 10 May 2021 (UTC)[reply]