Task: The book I am using is Fundamental of Corporate Finance, 4e
Problem 1: Why is debt a comparatively cheaper form of finance than equity?
Problem 2: If debt is cheaper than equity, why do companies approach the equity markets?
Problem 3: How can one minimize WACC when there is a constraint on raising debt? if so, how?
Problem 4: What are the effects of a corporate tax on the WACC of a business?
Problem 5: Is minimizing WACC by having a largely debt-based capital structure a high-risk strategy, given the threat of bankruptcy in an over-leveraged business? Explain your answer.
Problem 6: What are the extraneous factors which impact the ability of a business to radically alter its debt-equity mix?