Explore Westonci.ca, the top Q&A platform where your questions are answered by professionals and enthusiasts alike. Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.
Sagot :
A beneficial rule to follow is to set the firm's capital structure so that the firm's value is minimized.
Firm's Optimal capital structure
- In corporate finance, capital structure refers to the combination of several external funding sources, also known as capital, utilized to finance a company. It is listed on the balance sheet of the company and comprises equity owned by shareholders, debt, and preferred shares.
- The best combination of debt and equity financing for a company's capital structure optimizes market value while lowering the cost of capital. Theoretically, because debt financing is tax deductible, it has the lowest cost of capital.
- The best combination of debt and equity financing that increases market value while lowering a company's cost of capital is known as an optimal capital structure.
- One strategy to optimize for the lowest cost mix of financing is to reduce the average cost of capital.
To learn more about the Firm's Optimal capital structure refer to:
https://brainly.com/question/15041466
#SPJ4
Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.
