Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Gordon Scott has been an active investor and technical analyst or 20+ years. He ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The capital structure of a company directly impacts its profitability and ability to continue as a going concern. If a company is over-leveraged and cash flows are insufficient to meet recurring debt ...

Capital structure refers to the mix of funding sources a company uses to finance its assets and its operations. The sources typically can be bucketed into equity and debt. Using internally generated ...

Vol. 39, No. 2, Evolution and Revolution in International Management: A Topic and a Discipline in Transition (1999), pp. 105-136 (32 pages) A critical reflection of previous capital structure theories ...

Capital structure theories seek to explain why businesses choose different mixes of debt and equity to finance their operations. Banking firms represent a special case because of certain unique ...

Taking on more debt increases a company's risk of bankruptcy Reviewed by Julius Mansa Fact checked by David Rubin When companies can't pay their debts, they may have very limited options for their ...

The Modigliani-Miller theory of bank capital posits that higher capital requirements result in negligible costs for banks, making them an effective way for regulators to increase the safety of banks ...

The EBIT-EPS approach to capital structure is a tool businesses use to determine the best ratio of debt and equity that should be used to finance the business' assets and operations. At its core, the ...

This article examines the interaction between capital structure and advertising competition. Using a sample of firms that raise significant amounts of capital, we find that firms whose financial ...