About 25 years ago, when Japanese companies were "eating our lunch", many analysts noted that those companies had highly leveraged capital structures -- lot's of debt and little equity. Looking at the WACC formula suggests that more debt relative to equity might lower WACC. Is leverage "always" good or "always" bad? If it depends on the industry, please suggest which ones would be expected to have greatest and least leverage.,What do you mean by increased EPS. For example, reverse stock-splits also increase EPS, but do they actually increase value? Also, do taxes play any role in capital structure?
Paper#4065 | Written in 18-Jul-2015Price : $25