The best mix of debt financing and equity financing depends on the type of the industry in which the company operates and general economic conditions as well. Moreover, it depends on the following factors:
• Level of risk that management can be assumed in case of unpredicted events.
• Level of earnings to cover the interest payments associated with debt financing and dividend payments associated with equity financing.

• Level of control that management seeks to maintain as issuing new shares of stock brings new shareholders to the company who have voting rights as owners of the company.
• Costs of debt financing and equity financing at the time of capital structure decisions.
• Conditions in the financial markets.