Establishing a Capital Structure for a Firm Is Not Simple

question 6

Essay

Establishing a capital structure for a firm is not simple.Although financial theory guides the process,there is no quantifiable formula to follow.However,there are key factors which should be considered as they affect the target ratio.List and explain three such factors.

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Definitions:

Social Interaction

Is the process by which role performers act in relation to others.

Community Norms

The shared expectations and rules that guide behavior of people within social groups.

Violence

Physical force used with the intent to harm, damage, or kill someone or something.

Social Deviance

Behaviors or actions that violate the norms and expectations of a society or group.