Chapter 21 Capital Structure

Company Value and the Cost of Capital. 1.1 The objective of management is to maximize shareholder wealth. If altering the gearing ratio could increase wealth, then finance managers would have a duty to do so. 1.2 Is it possible to increase shareholder wealth by changing the gearing ratio? (a) The market value of a company is the sum of the market values of its various forms of finance. This ... ................
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