Problem:
I need your help with the definition on Debt Equity Mix and I also need your help answering this questions:
Why is debt a comparatively cheaper form of finance than equity?
If debt is cheaper than equity, why do companies approach the equity markets?
Can one minimize WACC when ther is a constraint on raising debt? If so, how?
What are the effects of a corporate tax on the WACC of a business?
Is minimizing WACC by having a larlely debt-based capital structure a high risk strategy, given the threat of bankruptcy in an overleveraged business? How do I explain this answer.
What are the extraneous factors which impact the ability of a business to radically alter its debt-equity mix?