THEORETICAL AND PRACTICAL STANDPOINTS OF CAPITAL STRUCTURE

Recapitulating theoretical attitudes towards capital structure we can state that these theories are greatly complementary (with few cases which have different implications for financial decisions of firms), and they suggest a series of determinants of capital structure. All theories agree with the attitude that in conditions of imperfect market it is possible to define capital structure which maximizates the value of market demands – cash flow todebt shareholders and holders, or total value of firm. Besides, there is consensus that financial lever increases with the fixed property, size of firm and investment (development) possibilities, and declines with earnings variability, possiblity of bankruptcy, profitability and uniqueness of products. In decision-making about capital structure, management must, starting with theoretical footing, consider intensity of specific factors which influence the selection of capital structure in concrete conditions of its firm. Especially important factors which should be evaluated are the level of business risk, firm profitability, property structure, internal conditions of firm, attitudes of financial analysts and agencies rating.