Capital structure
In this lesson, you'll learn what capital structure is and why it matters for understanding how companies fund themselves.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Capital structure and finance costs introduction
- 0:25 What is capital structure
- 1:44 Debt finance characteristics and costs
- 2:15 Equity finance characteristics and benefits
- 3:03 Types of financial capital overview
About this lesson
Capital structure describes the mix of debt and equity finance a company uses to fund operations and acquire assets—and this distinction is crucial because debt has a fixed cost obligation, while equity finance is free. You'll explore the three main types of financial capital covered in the FA syllabus: ordinary shares (equity), preference shares (which can be either equity or debt), and loan notes (debt). By the end, you'll understand how to identify and analyse the capital structure section of a statement of financial position, a skill you'll need for Financial Accounting and beyond.
Duration: 3m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Financial Accounting course
All 105 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in