Optimal capital structure: Difference between revisions
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2. | 2. | ||
The most appropriate capital structure taking account of both: | The most appropriate capital structure taking account of both: | ||
(i) the cost saving benefits of a low WACC, and | |||
(ii) the potential flexibility and safety benefits of a more conservative capital structure (with a relatively lower proportion of debt finance). | |||
== See also == | == See also == | ||
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* [[Modigliani and Miller]] | * [[Modigliani and Miller]] | ||
* [[Weighted average cost of capital]] | * [[Weighted average cost of capital]] | ||
Revision as of 14:44, 28 May 2013
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:
(i) the cost saving benefits of a low WACC, and
(ii) the potential flexibility and safety benefits of a more conservative capital structure (with a relatively lower proportion of debt finance).
