1.

Factors Affecting Capital Structure.

Answer»

(i) Internal Factors:

  • Type of Business,
  • Size of Business
  • Estimation of Business Income
  • Nature and Requirement of Assets
  • Attitude of Directors
  • Financial Requirement and
  • Duration of Capital Requirement.

(ii) External Factors:

  • Condition of Boom or Depression in the market,
  • Present Rate of Interest in Capital Market
  • Cost of Capital Expenses of issuing Securities
  • Legal Restrictions
  • Taxation Policy
  • Institutional Investors and
  • Foreign Institutional Investors.


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