How Do Capital Structure Choices Differ Across Industries

question 19

Essay

How do capital structure choices differ across industries?

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Definitions:

Common Stock

Represents ownership shares in a corporation, giving shareholders voting rights and a residue claim on corporate earnings in the form of dividends.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to investors, which are reinvested in the business.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.