7
Capital Structure and Dividend Policy
Learning Objectives
By the end of this chapter, you should be able to:
• Discuss the importance of capital structure.
• Define trading on the equity.
• Compute the financial leverage index.
• Define business risk.
• Define financial risk.
• List the critical factors in determining the optimal capital structure for a company.
• Describe the key factors in developing a dividend policy.
Sharing Ideas on Financing Expansion
As the group convened for the next monthly get-together, the pre-meeting conversation focused on funding the major capital investment program the company had just announced. Al opened ...
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