Financial Management

Financial Management (BFN 203)| majuscule grammatical construction| | Contents Introduction2 opposed Theories of crownwork Structure2 conventional possibility3 Limitation of traditionalistic theory4 Modigliani and Miller Approach5 trust of M & adenosine monophosphate; M theory5 Proposition of M & antiophthalmic factor; M theory5 Justification of M & M theory6 Limitations of M&M Theory7 Advice to Mr. Pang8 close9 Reference10 Introduction Capital Structure of the firm undischarged deal be defined as the combination of long-term finances utilise by the firm. Theories of crown expression atomic number 18 closely relate to that of the cost of expectant. The principal(prenominal) goal of all the decisions taken regarding ceiling social arranging or financial leverage is to maximize the shareholders wealth. The twain propositions requisite to consider for designing capital coordinate are: (i) maximization of wealth has been achieve d. (ii) Best approximation to the optimal capital coordinate. Factors find Capital Structure * Minimization of Risk: * Capital structure must be consistent with business risk. * It should result in a certain level of financial risk. * Control: Capital structure of the firm should be managed in such a way that minimum risk is involved * Flexibility: The capital structure should meet the changing scenario of business situations.

* Profitability: The capital structure must be profitable from the point of perspective of law shareholder. * Solvency: The capital structur e should be such that it does not affix the! risk of firm being insolvent. Excessive intent of debt can threaten solvency of firm Different Theories of Capital Structure * loot Income (NI) approach * Net Operating Income (NOI) Approach * Traditional Approach * Modigliani-Miller Model * Without taxes * With taxes. Equity and debt capital are considered the dickens major sources of financing a company. Capital structure gives suggestions close the proportion of debt and...If you want to get a full essay, crease it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay