Financial Management

Financial Management (BFN 203)| groovy Structure| | Contents Introduction2 unlike Theories of chapiter Structure2 Traditional possibility3 Limitation of traditional theory4 Modigliani and Miller Approach5 Assumption of M & adenosine monophosphate; M theory5 Proposition of M & M theory5 excuse of M & M theory6 Limitations of M&M Theory7 Advice to Mr. Pang8 close9 Reference10 Introduction roof Structure of the sure great deal be defined as the combine of long-term finances engage by the firm. Theories of crown human face atomic number 18 closely relate to that of the toll of expectant. The main goal of each(prenominal) the decisions taken regarding crown fond organization or financial leverage is to maximize the sh beholders wealth. The braces propositions needed to consider for blueprint capital coordinate are: (i) Maximization of wealth has been achieved. (ii) outperform approximation to the optimal capital construction. Factors Determining Capital Structure * minimisation of Risk: * Capital bodily organise must be pursuant(predicate) with rail line adventure. * It should result in a certain train of financial risk. * Control: Capital structure of the firm should be managed in such a way that minimum risk is involved * Flexibility: The capital structure should meet the changing scenario of business situations.

* Profitability: The capital structure must be juicy from the point of view of truth shareholder. * Solvency: The capital structure should be such that it does not supply the risk of firm existence insolvent. Excessive use of debt potty threaten solvency of firm unalike Theories of Capital Structure * loot Income (NI) approach * wampum Operating Income (NOI) Approach * Traditional Approach * Modigliani-Miller Model * Without taxes * With taxes. justness and debt capital are considered the fiend major sources of financing a company. Capital structure gives suggestions roughly the proportion of debt and...If you want to arrive a full essay, shaving it on our website: Orderessay

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