Optimal capital structure: Difference between revisions
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imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Add link.) |
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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]] | ||
* [[Capital management]] | * [[Capital management]] | ||
Revision as of 12:53, 8 August 2021
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).
