The basis for a firm's financing.
Also known as capitalization. This may be composed of several financing instruments such as common and preferred stock, and debt. Capital structure includes a company's debt-to-equity ratio (leverage), providing information about the level of risk involved in investing in the company. It is distinct from a firm's financial structure which includes other forms of capital such as accounts payable. The optimal capital structure for a particular company is the one which minimizes the cost of capital and maximizes its stock price.
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