A business can have a number of different possible capital structures. A firm’s capital structure is defined as “mix of a company’s long-term debt, specific short-term debt, common equity and preferred equity.(source)” In the paper “The Cost of Capital, Corporation Finance and the Theory of Investment”, Franco Modigliani and Merton Miller stated that if you consider two …Continue reading "What are Modigliani and Miller Proposition I and Proposition II?"
We are a few weeks into the series of finance-related posts. I figured I would explain this series a little before we go into today’s topic. I am currently working on an Masters of Business Administration at Cardinal Stritch University, in Glendale, WI. As I go through my homework, I often find that the textbook …Continue reading "What is the Weighted Average Cost of Capital?"