Structure Term Paper:
Capital structure is the interdependence of the company’s long-term and short-term debts or the mix of the company’s equity and debt capital and the capability of the company to cope with them.
Evidently, every company can not develop without investments and credits, so businessmen borrow money in banks or use obligations and bonds and the debt of the company grows constantly. If the company manages to succeed and its production brings profit, it has high chances to pay the credits or at least remain on the same debt level. Equity capital is the money with belong directly to the owner of the company who risks them and develops business from his own purse. It is obvious that nobody wants to risk his own money, so every businessman borrows money somewhere.
The only way to save the equity capital, which is considered to be more valuable, is to use the debt capital in the business operations with the hope that they bring profit and raise the equity capital. Naturally, every company wants to develop and broaden the scope of its activity and the choice of production. In order to do it a company requires money, which can be received from investors.
Generally, investors risk their money only if they know that they return their money with serious profits, so they pay key attention to the capital structure of the company and its equity capital in particular. If the equity capital of the company is powerful enough, the company will probably survive crisis and avoid bankrupting.
Capital structure is the important factor which influences the development and the success of the company, so if a student plans to become a successful businessman, an economist or a manager, he should be aware of this topic. A successful capital structure term paper should be informative, interesting and contain exclusively up-to-date facts which explain the main points of the topic and describe the structure and the problems of capital structure. It is important to know about the strong and the weak sides of various types of capital and support your idea with the trustworthy evidence.
In conclusion a student will need to summarize the paper and analyse the importance of capital structure for business and global economics.
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