Optimal capital structure: Difference between revisions
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imported>Doug Williamson (Link with MCT page.) |
imported>Doug Williamson (Link with Pecking order theory page.) |
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* [[Capital structure]] | * [[Capital structure]] | ||
* [[Modigliani and Miller]] | * [[Modigliani and Miller]] | ||
* [[Pecking order theory]] | |||
* [[Weighted average cost of capital]] | * [[Weighted average cost of capital]] | ||
* [[MCT]] | * [[MCT]] | ||
Revision as of 07:34, 19 May 2015
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 immediate cost saving benefits of a low WACC.
(ii) The potential flexibility and safety benefits of a more conservative capital structure (with a relatively lower proportion of debt finance).
