A company must raise sufficient capital to supply its long-term needs for fixed--asset investments and its must do so at the lowest possible cost. Capital can be taken from two sources: from debt by borrowing long-term funds in the market, and from equity by issuance of common or preferred stock, or by retaining and accruing earnings. The mix of long-term debt and equity is referred to as the firm's capital structure. This structure is partly determined by, and it partly determines, the cost of the different sources of capital, and it strongly influences the per-share profitability of the firm. The cost of capital is the return that must be generated from all the assets to cover the interests and provide the owners the appropriate rate to return on equity.