Determining: The Debt Equity Mox
I need your help with the following questions and can you help me with a detailed answer.
Why is debt a comparatively cheaper form of finance than equity?
If debt is cheaper than equity, why do companies approach the equity markets?
Can one minimize WACC when there is a constraint on raising debt? If so, how?
What are the effects of a corporate tax on the WACC of a business?
Is minimizing WACC by having a largely debt-based capital structure a high risk strategy, given the threat of bankruptcy in an overleveraged business? How do i explain the answer?
What are the extraneous factors which impact the ability of a business to radically alter its debt-equity mix?
Can you help me with the meaning to abbreviations, if they are used.
Thank you, your help is GREATLY appreciated.