1342_IM_Word_docsM16_EITE1342_12E_IM_C16课件.docVIP

Chapter 16Sourcing Debt Globally (Questions 16-1. Objective. What, in simple wording, is the objective sought by finding an optimal capital structure? When taxes and bankruptcy costs are considered, a firm has an optimal financial structure determined by that particular mix of debt and equity that minimizes the firm’s cost of capital for a given level of business risk. If the business risk of new projects differs from the risk of existing projects, the optimal mix of debt and equity would change to recognize trade-offs between business and financial risks. 16-2. Varying Debt Proportions. A