Respuesta :
According to the static theory of capital structure. the cost of equity capital is directly and proportionally related to capital structure. the static theory of capital structure M&M Proposition IIM&M Proposition the pecking-order theory the homemade leverage principle.
According to static theory, the ideal capital structure is one in which the expected cost of financial distress increases by the same amount as the net tax savings from the additional interest dollars.
Cost of Equity is the rate of return a company requires on an investment or project, or the rate of return an individual requires on an equity investment. The formula used to calculate the cost of capital is either the dividend capital model or the CAPM.
Cost of capital refers to the profit or profit that a company derives from undertaking a particular project. B. Construction of new production facilities expected to be achieved. Capital structure refers to the combination of short-term and long-term debt held by a company and the amount of common and preferred capital.
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