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What should be considered as best in the company's view
either debt or equity? Explain briefly?
- 7 Answers
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Answer / ganesh
Now this depends on nature of the company if the company
requires a huge investment on fixed assets then equity is
best option and on other side if company does not require
huge investments to be made on assets then debt is best
option. As we all know there can be no company with out
equity the best option could be to have mixture of both
equity and debt.
| Is This Answer Correct ? | 3 Yes | 0 No |
Answer / vijay gawalkar
The company can choose either Equity or debt or Both
(i.e., Mixture of Equity and Debt) in such a way that the
company's cost of capital should be minimum.
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / ganesh reddy
capital strecture meens combination of debt and Eqity. the
optim capital stcture gives high return and low cost of
capital. so the company dont depent on the single soure of
capital. the comapany follows mixter of this where it would
be(share holder) benifited.
thank u.
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / v.hemant kumar
Capital stucture of the company should be built up before
taking any decisions with regard to the ratio of debt &
equity of a company . For this purpose only there are
instruments like capital budgetting & deciding the cost of
capital & leverage analysis are used. However no company
exists without equity or debt. It also depends on the risk
taking factor of the company. IF the company is higly risky
it opts for more of debt & less risky option is debt
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / isaac kamya
equity is best since the price can be minimal and fit for
the consumer and also benefit the supplier but debt i would
say i dont recommend it since the rise in prive can also
affect the consumer and the supplier since there will be
very few buyers on market. for upcoming compaies it will
cause an operation under a loss which is not credible
enough
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / suman baba
i think ,mixture of both equity & debt is the best.there
should be balance between external funds and internal
funds.if external funds are more ,it could lead to
TAKEOVER. therefore capital gearing ratio came into
existance.
it may be,i am not sure.
| Is This Answer Correct ? | 0 Yes | 1 No |
Answer / ramana mfm
debt and equity those are important but equity is more
than to debt it is better
| Is This Answer Correct ? | 1 Yes | 2 No |
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