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A firm should not be concerned with its capital structure. What affects its value is the investments it makes
Member rating: No Rating | Words: 1994 | Submitted: Sat Jan 12 2008
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"A firm should not be concerned with its capital structure. What affects its value is the investments it makes." Word count: 1994 "A firm should not be concerned with its capital structure. What affects its value is the investments it makes." This paper aims to provide an investigation into the relationship that exists between the capital structure of a firm and its market value. For many years, companies have tried hard to discover a rule of thumb that would help them reduce their cost of capital, improve investment decisions and ultimately increase firm value. How a firm chooses a capital structure that is optimal and ideal is one of the most important issues in corporate finance - and one of the most complex. The aim of corporate finance has always been to work towards the maximisation of shareholder wealth and therefore increasing the value of the assets with the help of optimal financing...
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