Register now or log in to join your professional community.
The optimal capital structure of the company depends on the industry norms in which its operate. For a company that is operating in utility industry,energy,telecomunication industry, it will have more debt than equity.
Some argue that 50:50 debt to equity ratio is rquired. And other say that since debt is cheap and could help in avoiding paying more tax however, with team it could be a cause of financial stress of any company.
so its really depend on the company and its industry, there is no straight ansewr.