103876
Descripción
Mapa Mental por Harley Wickstead, actualizado hace más de 1 año
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Creado por Harley Wickstead
hace más de 11 años
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Traditional and
Modernist views
- Traditional
- Ignored taxes
- Risk: Debt < equity
- financing effects
- Debt= cheaper
- ^^ borrowing = ^^ WACC
- = ^^ in financial risk
- = ^^bankruptcy risk
- =^^ required rate of return
- =^^ WACC
- =^^ WACC
- =^^ required rate of return
- = ^^bankruptcy risk
- = ^^ in financial risk
- ^^ borrowing = ^^ WACC
- financing effects
- Interest paid
before dividends
- Minimum WACC
- Optimal capital structure
- Perfect mix of debt and
equity
- LINK between company's
value and level of borrowing
- LINK between company's
value and level of borrowing
- Perfect mix of debt and
equity
- Ignored taxes
- Modernist
- M&M 1958
- Ignores taxes
- Assumes a
perfect market
- No bankruptcy risk
- Kd is constant
- WACC is therefore constant
- WACC is therefore constant
- Kd is constant
- No bankruptcy risk
- Debt is risk free
- Debt is cheaper
- increase
proportion of debt
- increase
proportion of debt
- Debt is cheaper
- Equity is risky
- No optimal capital structure
- No perfect mix
- NO LINK between borrowing
and value of company
- NO LINK between borrowing
and value of company
- No perfect mix
- Ignores taxes
- M&M 1963
- Includes taxes
- Recognises tax relief
- From interest to debt holders
- interest payments = smaller tc liability
- =Tax relief + benefit to
borrowing
- ^^ borrowing \/ \/ WACC
- ^^ borrowing \/ \/ WACC
- =Tax relief + benefit to
borrowing
- From interest to debt holders
- no bankruptcy risk
= 100% debt
- VL > VU
- Includes taxes
- M&M 1958
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