Pie model of capital structure

Definition:

A model of the debt-equity ratio of the firms, graphically depicted in slices of a pie that represent the value of the firm in the capital markets.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Buying the index

Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.

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