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Is There a Rule for Finding Optimal Capital Structure

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Is there a rule for finding optimal capital structure?


Definitions:

Interest Expense

The amount an entity pays for the use of borrowed funds throughout a certain duration.

Net Cash Flow

The amount of cash generated or used by a company in a given period, calculated as the sum of cash flow from operating, investing, and financing activities.

Contingent Liability

A future financial liability that could emerge based on the result of a particular event.

Financial Statements

Documents offering a summary of a firm's financial status, encompassing the balance sheet, income statement, and cash flow statement.

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