Slide MGT204 Slide15

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McGraw-Hill Ryerson © 2003 McGraw–Hill Ryerson Limited

Corporate Finance

Ross  Westerfield  Jaffe _{Sixth Edition}

15

Chapter Fifteen

Capital Structure: Basic

Concepts

Prepared by Gady Jacoby

University of Manitoba and

Sebouh Aintablian

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McGraw-Hill Ryerson © 2003 McGraw–Hill Ryerson Limited

Chapter Outline

15.1 The Capital-Structure Question and The Pie Theory 15.2 Maximizing Firm Value versus Maximizing

Stockholder Interests

15.3 Financial Leverage and Firm Value: An Example 15.4 Modigliani and Miller: Proposition II (No Taxes) 15.5 Taxes