Financing Mix is one of the toughest topic of Finance Managment. So if you need Financing Mix Homework Help then you just need to mail us your queries and one of our expert will help you immediately. Finance is one the most important resource for any organization. Without finance no organization can function and no work can be done. With the growing economic scenario all around the world various different types of finance have crept into the business world.
Finance mix refers to the combination of various types of finances to supplement the fiscal requirement of any organization.
The main source of finance in any organization is the equity and debt. Equity refers to the owners fund in the organization like the share capital and debt refers to external funds like loans from banks and external parties. Equity does not carry a charge on them that is to say there is no compulsion to pay any dividend to the shareholders but in case of debt regular charges by the name of interest has to be paid to the fund providers.
Any organization should go for such a mix of debt and equity whereby the debt component is the lowest. An organization is in a good position if its equity is more than its debt.
An important measurement to calculate finance mix in an organization is the debt equity ratio. The main responsibility of an organization is to see how much debt to raise and how much funds to be raised from equity.
Many organizations feel that debt financing is cheaper than financing by equity as the debt interest enjoys the benefit from tax deductions, while others are of the view that equity is cheaper. Thus the finance mix differs from one organization to another.
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