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Business
3.5 finance
capital structure
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Created by
Myka Diaz
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Cards (5)
capital
structure
- represents finance provided to a business to enable it to operate over the long term
equity
- amounts invested by owners of the business
reasons for business to have higher debt
profits &
cash
flow
are strong so debt can be repaid rapidly
reasons for business to have higher equity
doesn’t want to risk paying
interest/repayments
Debt
- finance provided by external body