A Study on New Trends in Ebit Eps Analysis on Capital Structure

Abstract

The term capital structure refers to the percentage of capital (money) at work in a business by type. Broadly speaking, there are two forms of capital: equity capital and debt capital. It refers to the mix of long-term sources of funds, such as debentures, long-term debt, preference share capital and equity share capital including reserves and surpluses.  Each has its own benefits and drawbacks and a substantial part of wise corporate. The optimum capital structure is obtained when the market value per share is maximum. The issue of optimum capital structure has been theoretical. In practice, the determination of an optimum capital structure is a formidable task, and one has to go beyond theory. Since a number of factors influence the capital structure decision of a company, the judgment of the person making the capital structures if the decision plays a crucial par.