Abstract

This chapter outlines the basic components of the capital structure of a company. It also considers some of the factors that may be taken into account by the managers of a company when making financing choices. The discussions cover share capital terminology; accounting for an allotment of ordinary shares; characteristics of ordinary shares; debt finance terminology; characteristics of simple debt; hybrid securities; valuation of securities; corporate capital structure; sources of corporate finance; sources of external equity for SMEs and the role of venture capital; capital markets as a funding source for large companies; and efficient capital markets theory.

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