Category Archives: CAPITAL STRUCTURE COST OF CAPITAL AND VALUATION

CAPITAL STRUCTURE COST OF CAPITAL AND VALUATION

CAPITAL STRUCTURE COST OF CAPITAL AND VALUATION INTRODUCTION The discussions in the preceding Chapter have shown mat financial leverage has a magnifying effect on EPS such that, for a given level of change in EBIT, there will be a more than proportionate change in the same direction in the EPS. But financial leverage also increases me financial risk, default as the risk of possible insolvency wing out of inadeq