Master class in capital structure decision

Name: Master class in capital structure decision
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Complete guide applicable to capital structure decision and it’s different concepts:

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Created byHuman and Emotion: CHRMI

Last updated 7/2024

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What you'll learn

You will learn the Introduction to the capital structure including capital structure decision. Meaning of capital structure, Meaning of capital structure
You will be able to learn . A capital structure will be considered to be appropriate if it possesses the following features, Optimum capital structure
Learn Importance of capital structure. .Factors affecting capital structure
Learn about the details capital structure in related to all the illustrations.
Learn Leverages Interest coverage ratio, cash flow analysis and also you will able to understand through many illustrations also.
This training will be useful if your job involves Capital structure theories (Details). The three basic propositions of the MM approach also.

Course content

4 sections • 34 lectures • 5h 2m total length

Introduction and Study Plan8:46
Explore capital structure decisions through introductions, optimum structure concepts, and factors affecting capital structure, while analyzing leverage, interest coverage, and cash flow with practical illustrations.
Objective of the course2:28
Learn the concept of capital structure and its importance. Examine optimal capital structure, the choice of capital structure, and capital structure theories to gain knowledge on capital structure decisions.
1.1. Introduction to Capital Structure8:31
Learn how a company determines the right mix of debt and equity to fund operations and growth, balancing cost of capital, risk, and shareholder value.
1.2. Meaning of capital structure7:49
Define capital structure as the mix of a company’s long-term funds, blending debt and equity from sources like shares and debentures, and its impact on cost of capital and value.
1.3. Choice of a capital structure9:05
Evaluate factors shaping the optimal capital structure, including market conditions and earnings stability. Choose among equity, preference shares, and debentures; balance debt and equity to minimize cost and risk.
1.4. A capital structure features9:25
Identify the key features of an appropriate capital structure—flexibility, profitability, solvency, conservatism, and control—and emphasize diverse sources of funding, liquidity, and debt equity ratio not exceeding 2:1.
1.5. Optimum capital structure6:53
Identify the optimal debt–equity mix and other financial instruments to maximize shareholder value while minimizing the weighted average cost of capital, balancing risk and liquidity.
1.6. Importance of capital structure11:03
Understand how the debt–equity mix shapes the cost of capital and share price, balancing risk and return. Capital structure decisions drive long-term growth and maximize shareholder value.

2.1. An appropriate capital structure7:27
Analyze factors shaping capital structure and learn how trading on equity uses debt to amplify returns, balance earnings, dividends, and risk for growth.
2.2. Illustration9:07
Explore illustration on capital structure and trading on equity, calculating earnings per share under different financing options using net income, tax considerations, preferred dividends, and weighted average shares.
2.3. Leverages16:06
Analyze how trading on equity uses debt to boost returns on equity, and compare operating, financial, and combined leverage to balance risk and reward.
2.4. Illustration 27:23
Explore the evaluation of financial alternatives for capital structure decisions, comparing debt, equity, internal, and hybrid financing to identify the most cost-effective option without diluting control.
2.5. Interest coverage ratio, cash flow analysis7:44
Assess how interest coverage ratio and cash flow analysis reveal a firm's ability to meet debt obligations and guide optimal capital structure.
2.6. Illustration 38:21
Analyze illustration 3 to compare three capital-raising options: equity issue, debt issue, and buyback, and assess their impact on earnings per share to maximize EPS under a 30% tax rate.
2.7. Illustration 47:32
Illustration 4 shows how additional borrowings alter the interest coverage ratio by comparing current and revised EBIT and interest expenses.
2.8. Illustration 58:59
Evaluate financing alternatives for a 25 lakh plant by comparing debt options and equity impact to maximize earnings per share, using criteria, ROI/NPV, risk, and stakeholder analysis.

3.1. Details8:37
Explore capital structure theories that maximize firm value by optimizing debt–equity mix, including net income, net operating income, Modigliani–Miller, and traditional approaches and their cost-of-capital implications.
3.2. Capital structure relationship9:58
Analyze how two capital sources—debt and equity—shape capital structure through core theories, grounded in assumptions like perpetual life, constant operating profit, and Modigliani–Miller without tax and with tax.
3.3. Net income approach5:58
The net income approach shows capital structure affects firm value by lowering the cost of capital through debt, with constant debt and equity costs and no taxes or bankruptcy costs.
Net income approach 27:47
The net income approach shows that increasing leverage can lower the weighted average cost of capital and raise the firm's value, up to an optimal debt level.
3.4. Illustration 69:20
Illustration 6 explains how to compute the market value of equity, enterprise value, and the overall cost of capital, including the EV formula and its key components.
3.4. Illustration 6: Part27:15
3.5. Illustration 78:09
Calculate enterprise value by combining market value of equity and net debt, determine overall cost of capital from EBIT and EV, and analyze using EV/EBITDA.
3.6. Illustration 89:15
Illustration 8 shows enterprise value as market value of equity plus net debt, and derives the cost of equity via CAPM, linking EBIT to equity value.
3.7. Net operating income approach9:16
Explore the net operating income (NOI) approach to real estate valuation. See how property value equals NOI divided by the cap rate and how capital structure is irrelevant.
3.8. Illustration 96:37
The illustration demonstrates calculating the firm value and equity capitalization rate from EBIT using the net operating income approach, with enterprise value defined as equity plus net debt.
3.9. Modigliani Miller Approach (MM)6:46
The Modigliani–Miller approach shows a firm's value and cost of capital are independent of capital structure in perfect markets. Debt creates a tax shield that can raise value under taxes.
3.10. The three basic propositions of the MM approach5:57
The lecture explains the three basic propositions of the MM approach: capital structure irrelevance, the cost of equity with a financial risk premium, and dividend policy irrelevance under perfect markets.
3.11. MM approach10:25
Explore the mhm approach under perfect capital markets, detailing its no taxes, no transaction costs, and symmetric information assumptions, and describe how arbitrage maintains firm value independently of capital structure.
3.12. Illustration 107:03
Compare two firms with identical earnings and different debt levels to illustrate how leverage and tax shields affect a firm's total market value under Modigliani-Miller propositions.
3.13. Illustration 116:34
3.14. Traditional approach8:49
The traditional approach views debt as cheaper due to tax shields, achieving an optimal capital structure that minimizes cost of capital and maximizes firm value, until risk from leverage rises.
3.15. Illustration 127:34
determine the optimal debt–equity mix by evaluating debt and equity costs at different leverage levels to minimize the weighted average cost of capital and maximize firm value.

Requirements

You should have an interest in capital structure including capital structure decision.

Description

Take the next step in your career! Whether you’re an up-and-coming professional, an experienced executive, aspiring manager, budding Professional. This course is an opportunity to sharpen your capital structure decision. Capabilities, increase your efficiency for professional growth and make a positive and lasting impact in the business or organization.

With this course as your guide, you learn how to:

All the basic functions and skills required capital structure decisions.
Transform A capital structure will be considered to be appropriate if it possesses the following features, Optimum capital structure, Importance of capital structure. .Factors affecting capital structure
Get access to recommended templates and formats for the detail’s information related to capital structure decisions. .
Learn Capital structure theories (Details). The three basic propositions of the MM approach also. are presented as with useful forms and frameworks
Invest in yourself today and reap the benefits for years to come

The Frameworks of the Course

Engaging video lectures, case studies, assessment, downloadable resources and interactive exercises. This course is created to learn the Introduction to the capital structure including capital structure decision. Meaning of capital structure, Meaning of capital structure. A capital structure will be considered to be appropriate if it possesses the following features, Optimum capital structure, Importance of capital structure. .Factors affecting capital structure

The details capital structure in related to all the illustrations. Leverages Interest coverage ratio, cash flow analysis and also you will able to understand through many illustrations also. Capital structure theories (Details). The three basic propositions of the MM approach also. Traditional approach and also the different types of the illustrations.

The course includes multiple Case studies, resources like formats-templates-worksheets-reading materials, quizzes, self-assessment, film study and assignments to nurture and upgrade your capital structure decision in details.

In the first part of the course, you’ll learn the details of Introduction to the capital structure including capital structure decision. Meaning of capital structure, Meaning of capital structure. A capital structure will be considered to be appropriate if it possesses the following features, Optimum capital structure
In the middle part of the course, you’ll learn how to develop a knowledge of The , Importance of capital structure. .Factors affecting capital structure. all the illustrations. Leverages Interest coverage ratio, cash flow analysis and also you will able to understand through many illustrations also. Capital structure theories (Details). The three basic propositions of the MM approach also.
In the final part of the course, you’ll develop the Traditional approach and also the different types of the illustrations.

Who this course is for:

Professionals with capital structure including capital structure decision who wants to see themselves well established in capital structure decision.
New professionals who are looking to see them successful in different Interest coverage ratio, cash flow analysis and also you will able to understand through many illustrations also.
Existing executive board directors, managing directors who is looking to get more engagement and innovation from their teams and organizations

Master class in capital structure decision

What you'll learn

Explore related topics

Course content

Introduction to Capital structure8 lectures • 1hr 4min

2. Factors affecting capital structure8 lectures • 1hr 13min

3. Capital structure theories17 lectures • 2hr 15min

Exercise part1 lecture • 31min

Requirements

Description

Who this course is for: