How to Optimize Capital Structure Design for Business Growth
A company’s capital structure plays a pivotal role in shaping its ability to grow and sustain long-term success. The right balance of debt, equity, and other financial instruments can provide a solid foundation for expansion , enhance profitability, and minimize risk. Capital structure optimization is crucial for businesses seeking to capitalize on growth opportunities while effectively managing financial risks. This article will explore strategies to optimize capital structure design and how it can propel business growth. Understanding Capital Structure and Its Impact on Growth Capital structure refers to the mix of debt and equity that a business uses to finance its operations, investments, and growth. Debt includes loans, bonds, and other forms of borrowing, while equity represents ownership in the company, often in the form of stocks or retained earnings. The balance between these sources of capital is crucial in determining a company's financial risk, cost of capital, and capa...