CAPITAL STRUCTURE AND FINANCE COSTS
LEARNING OBJECTIVES
I.THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY
II.ORDINARY SHARE CAPITAL
III.RIGHTS ISSUES
IV.BONUS ISSUES
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I. THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY
Finance is provided by the capital invested in the business. There are a number of ways that a business can attract financial capital but each has its own characteristics and consequences. In general all forms of finance can be loosely categorised into two distinct groups.
-Debt, which requires some form of mandatory transfer of economic benefit to the provider of the finance, or
-Equity, which gives the provider of the finance the rights to share in the residual assets of the business when it ceases to trade.
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Download Lessons:
Chapter 5 Capital Structure and Finance Costs part 1
Chapter 5 Capital Structure and Finance Costs part 2