Capital Structure (updated for January 2018)

Рет қаралды 11,304

6 жыл бұрын

In this spreadsheet, I compute the cost of capital and firm value, at different debt ratios, with the intent of finding the optimal mix. It reflects the changes and constraints on debt in the 2017 tax reform act.
Spreadsheet: www.stern.nyu.edu/~adamodar/pc...

Пікірлер: 7

@EZG595 4 жыл бұрын

Thank You for the great video and spreadsheet!!!

@ajay32197 6 жыл бұрын

Thanks a lot professor.

@mftgdeserteagle 6 жыл бұрын

Professor, Shouldn't cash be included somewhere into capital structure decisions, since it can be regarded as negative debt (essentially using net debt instead of debt)?

@hhyperball 6 жыл бұрын

mftgdeserteagle cash is at the asset side; capital structure is about how the liability side of the balance sheet should be financed.

@mftgdeserteagle 6 жыл бұрын

Cash can be regarded as negative debt. If you issue 10Mn in debt and let those 10Mn sit in cash, then your leverage is pretty much the same because you can take those 10Mn in cash to retire the 10Mn in debt at any time. An apparently overlevered firm may not be so if it holds a lot of cash...

@odp2116 6 жыл бұрын

Professor, I don't understand why enterprise value changes after the whole process whilst the first assumption implies that debt leaves as equity so the firm value stays the same...

@thanhthanhnguyen6217 4 жыл бұрын

Dear Sir, I'd like to ask how the company reaches its optimal capital structure and how fast? To reach its optimal structure, the company should buy back shares, is that right?