Explore how financing decisions can have an impact on the firm (i.e.

Explore how financing decisions can have an impact on the firm (i.e. how much debt a company uses relative to equity) affect the company’s risk, average cost of capital and hence the company’s value?

If an optimum financing mix exists (i.e. one that gives a minimum WACC), then it would be in a company’s best interests to locate it and move towards this optimal capital structure).How can theory explain capital structure practice?

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