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- how can a company can raise capital through the issuance of equities?Include the advantages and disadvantages of the methodology.What are some factors that affect capital structure decisions made by management? What are the arguments in support of using debt as part of the capital structure?why an increase in cost of debt will increase cost of capital associated with business risk and financial risk?
- What are the differences between raising capital from a financial institution and raisingfinances directly from the market?Which is easier to calculate directly, the expected rate of return on the assets of a firm or the expected rate of return on the firm’s debt and equity?What is meant by capital structure, what are the characteristics of it's main components, and how that may affect a company solvency?
- Leverage and the Capital Structure. Why is the use of debt financing referred to as financial “leverage?” What is the basic goal of financial management with regard to the capital structure? Is there an easily identifiable debt-equity ratio that will maximize the value of a firm? Why or why not?What is financial leverage, and how does it relate to the capital structure of a business?Describe the strenghts and weaknesses of companies dding debt in their capital structure.
