Optimal capital structure: Difference between revisions
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''Corporate finance - capital management.'' | |||
1. | 1. | ||
The capital structure which results in the lowest Weighted Average Cost of Capital (WACC). | The capital structure which results in the lowest Weighted Average Cost of Capital (WACC). | ||
2. | 2. | ||
The most appropriate capital structure taking account of both: | 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). | |||
== See also == | == See also == | ||
* [[Black swan]] | |||
* [[Capital]] | |||
* [[Capital management]] | |||
* [[Capital structure]] | * [[Capital structure]] | ||
* [[Green halo]] | |||
* [[Idle cash]] | |||
* [[Modigliani and Miller]] | * [[Modigliani and Miller]] | ||
* [[Weighted average cost of capital]] | * [[Pecking order theory]] | ||
* [[Tax shield]] | |||
* [[Weighted average cost of capital]] (WACC) | |||
[[Category:Corporate_finance]] | |||
[[Category:Long_term_funding]] | |||
Latest revision as of 20:37, 3 January 2023
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).
