Capital of a company can be generally categorized into two classes including equity capital and debt capital. This shows that equity is a part of capital and it is equal to capital only if the debt capital is zero. Companies have two options to raise the funds. If a company goes for debt capital then it lends money from creditors with some cost of funds while if a company goes for equity capital then it raises money by giving the ownership rights to the investors. The capital structure of a company is composed of debt and equity capital.