How can you determine the optimal capital structure for a company?
How can you determine the optimal capital structure for a company? This is a crucial question for any business that wants to maximize its value and minimize its cost of capital. Capital structure refers to the mix of debt and equity that a company uses to finance its operations and investments. In this article, you will learn about the main factors that influence the optimal capital structure, the trade-offs between debt and equity, and some common methods to estimate the optimal capital structure.