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What Is Capital Structure and How Does It Work?
As the private markets continue to shift, dealmakers have become increasingly scrupulous when it comes to deploying capital. If you’re in the market for a government contractor, you need a thorough understanding of the company you invest in. Evaluating capital structure is an essential aspect of the due diligence process that helps investors understand and mitigate risk. Capital structure refers to how a company finances its growth and operations facilitated through a mix of debt and equity. Understanding capital structures allows investors to assess the level of financial risk associated with an investment or acquisition.