Stories Inside
1. Inventory Classification - ABC System
2.Strategy Formulation
3. A Country Betrayed by Star Icons
4. Bottom up Leadership
5. Microsoft to launch tablet PC
6. Christian Dior's India Venture
7. Wink and You are No More : How to maintain market leadership
8. Inventory Types
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Capital structure is the ratio of equity and debt in the financing of a company. Various principles effect this ratio.
They are as follows,
1.Cost Principle : Debt is cheaper as it has to be serviced at a fixed rate, equity is costly as a higher ROI is expected by the investor.
2.Risk Principle : Debt is riskier as it entails a compulsory interest servicing, whereas dividend on equity can be foregone by the management in years of loss or lean profit.
3.Capital Principle :Equity gives ownership, and voting rights to investors hense diluting control of original promoters. Debt has no such disadvantage.
4. Timing : When economy is booming people invest in shares for higher returns, when economy is in recession people prefer bonds and debenture as it gives a higher fixed income.
