Define the idea of capital structure and capital components Why is capital structure important to the cost of capital concept In many capital structure discussions, preferred stock is lumped in with either debt or common equity With respect to the cost of capital, however, its treated separately Wh...

Capital components are the sources of capital generally debt equity and preferred stoc ...

Define the idea of capital structure and capital components. Why is capital structure important to the cost

Question:

Define the idea of and capital components. Why is important to the concept? In many discussions, preferred stock is lumped in with either debt or common equity. With respect to the however, it’s treated separately. Why?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...