i agree that if the company increases the amount of


I agree that if the company increases the amount of debt, it will be able to lower its cost of capital this is because debt financing tend to have tax advantages over the equity financing. The interest expenses of the debt tend to be tax deductible and this helps to reduce the cost of debt capital. If the amount of debt is increased form from 40% its evident form the WACC calculations that that the cost of capital will reduce from 3.99% to 3.96%. 

   Advice to the CEO

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

I would advise the CEO to adopt an optimal capital structure by looking for a structure that offers an ideal balance between debts and equity and one that will minimize the  

"If this is not the paper you were searching for, you can order your 100% plagiarism free, professional written paper now!"

"Do you have an upcoming essay or assignment due?

Get any topic done in as little as 6 hours

If yes Order Similar Paper

All of our assignments are originally produced, unique, and free of plagiarism.