Optimal capital structure: Difference between revisions
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imported>Doug Williamson (Link with Pecking order theory page.) |
imported>Doug Williamson (Layout.) |
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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 benefits of a more conservative capital structure (with a relatively lower proportion of debt finance). | |||
Revision as of 12:12, 11 May 2016
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 benefits of a more conservative capital structure (with a relatively lower proportion of debt finance).
