How does it affect the case of the economy in the use of debt in Financial Structure?

The productive and efficient use of funds in the Capital structure in general bring overall improvement in the economic development, including employment, income generation, wealth maximization, Economic stability, per capita-income, GDP, Economic Growth, Countries reputation, Money values and overall positive impact and welfare of the nation.

The use of Debt instrument as a financing strategy has a postive and negitive impact on the economy of the company in relation to the life cycle of the company and the industry itself. At the inception stage owner capital is preferable than any financing. At growth I stage trade, bank loan, overdraft, retained earning is preferable. B/s the cost of debt instrument at this stage is high and creates proble to the company. At growth stage II long term finance and Debt instrument is preferable since their cost is lower than the cost of capital. Tax advantage brings a higher profit to tyhe comapny. At Maturity stage all; source are pereferable to maintain ROI. At decline stage it is not recommended to use debt finance since its cost is high and it will create any takeover merger propositions.

Affect the economic situation over the size of the debt, which the company can be used to finance its operational In the case of economic boom increases the level of sales and net operating profit, and so the use of debt is increasingly lead to positive results is in maximizing the value of profit available for distribution and thus maximize the earnings per share of Rabh.binma in the economic situation normal the level of sales and net operating profit average, which requires reliance on a limited amount of debt in order to maximize the company's earnings per share of the profit available for distribution either in the case of economic recession the level of sales and net operating profit is low and then the reliance on debt financing leads to negative results the deterioration in earnings per share of profit available for distribution.

agreed with gentlemen

agree with both mr venkitaraman & mr georgi  

Agree with venkitaraman0/

Thank you Mr. George Asi, the question and answer.

All answers professors adequate and sufficient

I agree with all answers given by Mr. VENKITARAMAN KRISHNA MOORTHY VRINDAVAN, Mr georgei assi   and Mr.Tegegne Abrham