Explore how financing decisions can have an impact on the firm (i.e. how much debt a company uses relative to equity) affect the company’s risk, average cost of capital and hence the company’s value?

Explore how financing decisions can have an impact on the firm (i.e. how much debt a company uses relative to equity) affect the company’s risk, average cost of capital and hence the company’s value?

If an optimum financing mix exists (i.e. one that gives a minimum WACC), then it would be in a company’s best interests to locate it and move towards this optimal capital structure).How can theory explain capital structure practice?