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Capital Structure
The mix of debt and equity financing a company uses to fund its operations and growth.
M&M Proposition II
Modigliani and Miller's Proposition II states that a company's cost of equity increases as it increases its leverage due to the risk premium on equity.
Debt-Equity Ratio
A financial ratio that measures the relative proportion of shareholders' equity and debt used to finance a company's assets.
Financial Risk
The chance of incurring a loss in capital in an investment or business operation.
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