Chapter 16 financial leverage and capital structure policy pdf


Chapter Outline. The Capital Structure Question. The Effect of Financial Leverage. Capital Structure and the Cost of Equity Capital. M&M Propositions I and II with Corporate Taxes. Bankruptcy Costs. Optimal Capital Structure. The Pie Again. Observed Capital Structures. A Quick Look at the Bankruptcy Process Chapter 16 - Financial Leverage and Capital Structure Policy 16-1 CHAPTER 16 FINANCIAL LEVERAGE AND CAPITAL STRUCTURE POLICY Answers to Concepts Review and Critical Thinking Questions 1. Business risk is the equity risk arising from the nature of the firm’s operating activity and is directly related to the systematic risk of the firm’s assets. W 3/4 Cost of Capital Chapter 12 No JFRC classes held week of March 9 for midterm break M 3/16 Capital Structure and Leverage Chapter 13 W 3/18 Review Chapters 7-8, 11-13 F 3/20 Special Topics M 3/23 Exam #2 Chapters 7-8, 11-13 W 3/25 Dividend Policy Chapter 14 M 3/30 Special Topics Capital structure is the composition of debt, and stock issued by the organization. It signifies the manner in which fund is raised by the organization. Optimal capital structure is the suitable mix of debt and equity that maximizes the stock price. Business risk is the risk that might be faced by the firm. Oct 13, 2015 · Chapter 16 - Capital Structure: Basic Concepts Chapter 17 - Capital Structure: Limits to the Use of Debt Chapter 18 - Valuation and Capital Budgeting for the Levered Firm Chapter 19 - Dividends and Other Payouts Part V - Long-Term Financing Chapter 20 - Raising Capital Chapter 21 - Leasing Part VI - Options, Futures, and Corporate Finance