Capital Structure and Financing Decisions

Capital structure refers to the mix of debt and equity used to finance a healthcare organisation's assets and operations. This topic explores financing decisions, including the choice between internal funds, equity issuance, and debt instruments (loans, bonds), and their impact on risk, cost of capital, and financial flexibility. For Zambian university students in finance and healthcare administration, understanding capital structure is crucial for planning hospital expansions, equipment purchases, and infrastructure projects. It covers leverage ratios, the trade-off between risk and return, and the influence of interest rates and regulatory environment. Effective capital structure management enables health institutions in Zambia to optimise funding costs, maintain creditworthiness, and support long-term strategic goals, preparing graduates for roles in health sector investment, treasury, and strategic planning.