Question
We are studying capital structure in Corporate Finance. Our discussion question is: In each of the theories of capital structure the cost of equity rises
We are studying capital structure in Corporate Finance. Our discussion question is:
In each of the theories of capital structure the cost of equity rises as the amount of debt increases. So why don't financial managers use as little debt as possible to keep the cost of equity down? After all, isn't the goal of the firm to maximize share value and minimize shareholder costs?
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
