Capital Structure & Budgeting

Capital Structure and Budgeting is one of the highly recommended courses for a major in Finance that helps to take financial decisions rationally especially for long-term investments. Capital structure refers to the composition of the "Shareholder Equity and Liabilities" section of a corporation's balance sheet. Capital budgeting, on the other hand, refers to the process of evaluating investment prospects especially for long-term decisions making. The capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings. Capital budgeting is used by companies to evaluate major projects and investments, such as new plants or equipment. The process involves analyzing a project's cash inflows and outflows to determine whether the expected return meets a set benchmark.