Explain Why the Optimal Capital Structure Is One That Maximizes

question 100

Essay

Explain why the optimal capital structure is one that maximizes the value of marketed claims and minimizes the value of nonmarketed claims.

Understand how to calculate the rate of return on various financial instruments and loans.

Interpret the difference between nominal and effective rates of interest.

Apply the concepts of time value of money to determine the value of annuities and bonds.

Calculate the sustainability of funds and investments over time given specific withdrawal or deposit conditions.