English, asked by vspmanideepika5292, 1 year ago

What do you mean by traditional theory?

Answers

Answered by indianhun11
0

Answer:

The Traditional Theory of Capital Structure states that when the Weighted Average Cost of Capital (WACC) is minimized, and the market value of assets is maximized, an optimal structure of capital exists. This is achieved by utilizing a mix of both equity and debt capital.xplanation:

Answered by s1266aakansha782696
2

Hey mate,

The traditional theory of capital structure says that for any company or investment there is an optimal mix of debt and equity financing that minimizes the WACC and maximizes value. Under this theory, the optimal capital structure occurs where the marginal cost of debt is equal to the marginal cost of equity .

Hope it helps.

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