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Abstract
In finance, Capital Structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm‘s capital structure is then the composition or 'structure' of its liabilities. It is a mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds. Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock, preferred stock or retained earnings. Short-term debt such as working capital requirements is also considered to be part of the capital structure.