Establishing a Capital Structure for a fiRm Is Not Simple

question 37

Essay

Establishing a capital structure for a firm is not simple.Although financial theory guides the process, there is no simple formula.List and explain four main items that one should consider in determining the capital structure.

---

Definitions:

Automatic Behaviors

Actions that are performed without conscious thought as a result of learning, habituation, or innate mechanisms.

Experiential System

Refers to a way of processing information that is automatic, holistic, and driven by emotions and personal experience.

Automatized Behavior

Actions or behaviors that have become automatic due to repetition and are performed without conscious thought.

Cognitive Processes

Mental activities involved in the acquisition, processing, and storage of knowledge.