Problem
A. Explain what the capital structure of a company is.
B. List the sources of long-term financing used by companies to finance investment capital, in order from lowest to highest cost, and explain what is the factor that causes one source of capital to be more or less expensive than the other sources
C. Explain why companies external capital and not income from operations?
D. Explain the cost of capital concept and how it serves companies.
E. Argues about the importance of the Cost of Capital.