Unit 8: Corporate Capital Structure
Does it matter whether a company's assets are financed with 50% from a bank loan and 50% from investors' money? Does that form of capital structure, where 50% of assets come from debt and 50% from equity, influence how a company succeeds in business? This unit addresses these questions by focusing on the theory of capital structure. Specifically, this unit explains the concept of capital structure and introduces the most common formula used when comparing a company's return to the cost of capital: the weighted average cost of capital (WACC). We will also explore how tax policy affects a company's true cost of capital.
Completing this unit should take you approximately 5 hours.
8.1: Capital Structure Finance Theory
8.2: Cost of Capital and Capital Structure – WACC
Unit 8 Practice and Assessment