Capital Structure : Activity Context

This discussion helps you develop the skills to master the following course competencies:

o Apply the theories, models, and practices of finance to the financial management of the firm.

o Integrate financial analyses into general business management planning and decision making.

Activity Instruction

Select two of the many capital structure concepts such as Modigliani and Miller, Pecking Order Theory, leverage, and so on, and explain what each is as well as how it differs from the other concept you selected. Then, step back and discuss why it is important for managers or leaders to optimize their capital structure.

Support your post as appropriate with the theories presented in this week's required reading. (See below/attachment)

Readings

Use your Corporate Finance: Core Principles and Applications textbook to read the following:

o Chapter 14, "Capital Structure: Basic Concepts."

o Chapter 15, "Capital Structure: Limits to the Use of Debt."

o Chapter 16, "Dividends and Other Payouts."

Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2018). Corporate finance: Core principles and applications (5th ed.). New York, NY: McGraw-Hill.