Optimal capital structure: Difference between revisions
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''Corporate finance - capital management.'' | |||
1. | 1. | ||
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* The immediate cost saving benefits of a low WACC. | * The immediate cost saving benefits of a low WACC. | ||
* The potential flexibility and safety benefits of a more conservative capital structure (with a relatively lower proportion of debt finance). | * The potential flexibility and safety-robustness benefits of a more conservative capital structure (with a relatively lower proportion of debt finance). | ||
== See also == | == See also == | ||
* [[Black swan]] | |||
* [[Capital]] | |||
* [[Capital management]] | |||
* [[Capital structure]] | * [[Capital structure]] | ||
* [[Green halo]] | |||
* [[Idle cash]] | |||
* [[Leverage]] | |||
* [[Modigliani and Miller]] | * [[Modigliani and Miller]] | ||
* [[Pecking order theory]] | * [[Pecking order theory]] | ||
* [[Weighted average cost of capital]] | * [[Tax shield]] | ||
* [[Weighted average cost of capital]] (WACC) | |||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
Latest revision as of 16:21, 20 September 2025
Corporate finance - capital management.
1.
The capital structure which results in the lowest Weighted Average Cost of Capital (WACC).
2.
The most appropriate capital structure taking account of both:
- The immediate cost saving benefits of a low WACC.
- The potential flexibility and safety-robustness benefits of a more conservative capital structure (with a relatively lower proportion of debt finance).
