Archive for ‘Finance’

August 29, 2015

Relationship between Firm’s capital structure and personal capital structure

Each and every firm has two basic capitals on its disposal. These capitals are equity capital and debt capital. Equity capital is money of the firm’s owner. In other words it is money of the firm and the firm is free to use the same for all kind of purposes. When firm don’t have sufficient equity capital for any activities it uses debt capital. The debt capital is borrowed money from an outsider. It is borrowed at some cost for some specific purpose.

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