Costs and risks of an aggressive financing strategy

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Reference no: EM133433676

Question 1) What is the Weighted Average Cost of Capital (WACC) and how is it calculated? Present and interpret the formula seen in the weekly talk.

Question 2) What is the main benefit of debt financing? How does an over-indebtedness affect corporate value and can it nullify the benefit derived from the tax shield?

Question 3) What are the benefits, costs and risks of an aggressive financing strategy and a conservative financing strategy?

Question 4) How is the optimal WACC (WACC) determined? Explain your answer.

Reference no: EM133433676

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