What is complete capitalization?
The total capitalization of the company represents, in addition to its own capital in the balance sheet of long -term debt obligations. The total capitalization is also referred to as the capital structure on which companies are during the industries to fund the expansion, projects and product development. Debt and own capital are two primary ways of approaching capital, and there are macroeconomic and internal corporate conditions that determine which form should be issued and when. By examining the overall capitalization of the company, investors and financial analysts are able to better assess the financial health of the balance sheet.
When the company decides to issue its own capital, there are different types of securities from which you can choose. All types of equity are reflected and detailed in the balance sheet of the company to form part of the total capitalization. The ordinary shares are the most common form of equity and represents the number of shares issued on the financial markets for the investorykoup and sell for the price of shares. Investors will acquire partial own ownership of the company on the basis of the percentage of shares owned. The investor will receive voting rights for the main corporate event for each of the ordinary shares. In addition, joint shareholders become eligible for dividends in the form of cash or additional shares quarterly or annually.
The preference also includes part of the total capitalization. These shares differ from joint shares in that not so many shares are usually traded and the stock price does not circulate as well as ordinary shares. Unlike ordinary shareholders who earn profits from the valid prices associated with dividend, preferred shareholders generate a large part of their profits from consistent dividend divide divided by paid companies at a predetermined rate.
bonds form part of the total capitalization of the company's balance sheet in the form of long -term DLuh's obligations. These bond problems can take up to 30 years. Companies issue debt and investors will become creditors.
The Company must continue to pay investors ongoing interest payments on the total capital throughout the bond until the due date. Before the debt is issued, managers must be prepared to discipline profits to be paid by creditors. If the company is forced to bankruptcy and interest paying will be missing, the largest bond holders could take control of the company. Too many debts in the balance sheet in connection with its own capital could harm the company's rating as issued by a third -party agency.