Simple capital structure

A corporation with a simple capital structure does not have any securities outstanding that could potentially dilute the value of its earnings per share. This means that its capital structure includes no more than common stock and non-convertible preferred stock. When this type of financing structure is present, there are no securities that could potentially be converted into common stock, thereby diluting the ownership interests of existing shareholders.

Smaller companies frequently have simple capital structures, while larger entities are more likely to have complex capital structures.