Andrew Stolz

AUGUST 6, 2020

Because it is tax-deductible, debt financing tends to have a lower cost than equity financing. However, it has to be kept in mind that having too much debt financing will affect the level of risk the company has. Why is the Optimal Capital Structure Important?

Capital Structure 52

Capital Structure Debt Financing Equity Financing Finance 52

RNC

MAY 21, 2024

When raising funds, the primary question is whether to opt for equity or debt financing. Equity financing risks diluting ownership stakes in the company, while debt financing entails hefty interest rates. Reach out today for customised business valuation solutions. first appeared on RNC.

Debt Financing 52

Debt Financing Equity Finance Business Valuation 52

Andrew Stolz

AUGUST 5, 2020

The optimal capital structure of a company is the proportion of debt and equity financing that maximizes the company’s value while minimizing the cost of capital (WACC). Represents the required return firms should earn to satisfy their investors. What Impacts the Weighted Average Cost of Capital?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Equity Capital Structure Equity Financing 52

Equilest

MARCH 28, 2025

Enterprise Value Key differences Why enterprise value is often positive Real-World Examples of Negative Equity Value Troubled companies (e.g., The Role of AI in Business Valuation How AI Helps Analyze Company Value Artificial intelligence (AI) is increasingly being used to enhance business valuation processes.

Equity 40

Equity Net Debt Enterprise Value Capital Structure 40

Andrew Stolz

AUGUST 6, 2020

(Where V (unlevered) = company with no debt financing and V (levered) = company with some debt financing). Investors that purchase shares of a leveraged firm, one with a mix of debt and equity financing, would receive the same profits as when buying shares of an unleveraged firm, which is financed entirely by equity.

Debt Financing 52

Debt Financing Capital Structure Equity Finance 52

Equilest

JANUARY 25, 2025

Benefits and Risks of Convertible Loans Benefits Flexibility : Offers debt-like security with equity upside. Speed : Faster negotiation compared to equity financing. Valuation complexity : Difficult to determine fair terms in volatile markets. Reduced Dilution : Founders retain more ownership during early stages.

Discounted Cash Flow 40

Discounted Cash Flow Equity Debt Financing Equity Financing 40

Valutico

APRIL 17, 2023

A Short Summary The Weighted Average Cost of Capital (WACC) is an important tool for business valuation. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares). Riskier industries, may have a higher Cost of Capital. What is the WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 17, 2023

A Short Summary The Weighted Average Cost of Capital (WACC) is an important tool for business valuation. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares). Riskier industries, may have a higher Cost of Capital. What is the WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 12, 2023

A Short Summary The Weighted Average Cost of Capital (WACC) is an important tool for business valuation. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares). Riskier industries, may have a higher Cost of Capital. What is the WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52