Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

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A multiperiod model of optimal capital structure is developed under the assumption that earnings follow an autoregressive process. Firm value and leverage vary through time and, at each date, the firm ...

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Gordon Scott has been an active investor and technical analyst or 20+ years. He ...

A company needs financial capital to operate its business. For most companies, financial capital is raised by issuing debt securities and by selling common stock. The amount of debt and equity that ...

Fruhan, William E., Jr. "Note on the Theory of Optimal Capital Structure TN." Harvard Business School Teaching Note 292-047, January 1992.

Capital structure refers to the mix of funding sources a company uses to finance its assets and its operations. The sources typically can be bucketed into equity and debt. Using internally generated ...

A company’s capital structure refers to how it finances its operations and growth with different sources of funds, such as bond issues, long-term notes payable, common stock, preferred stock, or ...