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Capital Structure: Sell It Off!

In: Applied Corporate Finance

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  • Mark K. Pyles

    (College of Charleston)

Abstract

In this chapter, we will examine the other primary component of capital structure. Most individuals understand the basic idea of stocks and stock markets, and for good reason. Equity markets are not just the focus of financial professionals. The idea that individual investors can own a piece of a publicly traded firm is probably the most important concept in investments as it allows firms to have a direct influence on individual wealth. On the other hand, it allows firms to obtain funding on a scale much larger than through taking loans or private investment. Thus, the concept of public equity is critical from both perspectives—that of both the investor and the firm. In this chapter, we will cover the characteristics of equity, learn how to theoretically value stock, and most importantly, discuss equity from the company’s perspective.

Suggested Citation

  • Mark K. Pyles, 2021. "Capital Structure: Sell It Off!," Springer Texts in Business and Economics, in: Applied Corporate Finance, edition 2, chapter 6, pages 199-235, Springer.
  • Handle: RePEc:spr:sptchp:978-3-030-81631-5_6
    DOI: 10.1007/978-3-030-81631-5_6
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