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How would a financial manager determine optimal capital structure? How this would fit in with the company’s capital expenditures, growth plans and operating results?
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Optimal Capital Structure is a blend of debt, common, and preferred stocks. The goal is to maximizes the companies share prices and reduce capital cost. If there is to much debt in the equation then the ROI (return on investment) to the shareholder would be reduced. A growth plan allows leaders to track the growth of capital to gain a competative advantage.
Brigham, E. F., & Ehrhardt, M. C. (2017). Financial management: Theory and practice (15th ed.). Mason, OH: South-Western