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Managementof
Long-term Capital
Tousif
• ID NO-1501010018
IBN
CHOWDHURYHAQUE
Managementof
Long-term Capital
Long-term Capital:-long term funds employed in a business
Contributed by owner + Retained earnings = Ownership fund Long term borrowed is called Debt
A tale of two
Capital Structure for investors
Understanding the value of Debt and Equity
Capital Structure is the financial
BLUEPRINT!of the firm
Two philers
Capital Structure is the combination of EQUITY Financing
and DEBT Financing
Ratio between DEBT and EQUITY!
EQUITY!
Stock er proker
DEBT!
DEBT
• Debentures
• Bonds
• Long term borrowings
• Other long term liabilities
Capital Structure has 2 kinds:-
• 1. Simple
• 2. Complex
Capital Structure can be:-
80% 20%
80%20%
Capital Structure can be:-
100% 100%
Cost Of
Capital
Everyone Likes Story!!!Don’t U!!!!
Radhone
• ID NO-1501010032
MAHMODHLESAN
Determinants of
Capital Structures
Higher Earnings of
Equity Shareholders
Control
Minimization of Cost of
Capital
Financing Need
Period of Finance
Nature of
the Business
Size of the Business
Hasnath
• ID NO-1501010011
SHAHRIARTAMAL
Optimum Capital Structure
SoundCapital
Structure
Risk point of view
Return point of view
Objectives:-
Low cost and High
return
Control
Solvency
Conservation
Simplicity
ARIFUL
• ID NO-1501010006
HAQUE
Trading on Equity
Limitation of Trading on Equity
Return below the required
level
Instability Earnings
Limitation of borrowing and
raising preference
capital
Higher cost of
subsequent
MAHMUDUL
• ID NO-1501010031
HASANMUSA
