Quotes About Capital structure

a handful of decisions that only the board can make: the decisions to select, retain, or dismiss the chief executive; to establish a climate of ethics and integrity; to set the goals and incentives for the executive team; and to pinpoint the company's central idea, risk appetite, and capital structure.

Capital structure isn't an eyeshade economic thing: It's about your ability to protect your workforce and your service levels.

Principle of Optimum Capitalization Structure.

look at the company's capital structure. Turn to the balance sheet to see how much debt (including preferred stock) the company has; in general, long-term debt should be under 50% of total capital. In the footnotes to the financial statements, determine whether the long-term debt is fixed-rate (with constant interest payments) or variable (with payments that fluctuate, which could become costly if interest rates rise).

An industrial company's finances are not conservative unless the common stock (at book value) represents at least half of the total capitalization, including all bank debt.3 For a railroad or public utility the figure should be at least 30%.

Graham feels that five elements are decisive.1 He summarizes them as: the company's "general long-term prospects" the quality of its management its financial strength and capital structure its dividend record and its current dividend rate.

The transaction cost approach maintains that some projects are easy to finance by debt and ought to be financed by debt. These are projects for which physical-asset specificity is low to moderate.

One, I love the creativity. I love the ability to create a capital structure that is appropriate for a company, no matter what field it happens to be in.

What happened after publication of our paper was that, for the next 40 years, people said, all right, we now know the answer to the capital structure question under ideal conditions.