Uploaded April 2025 | Updated September 2026, 1 week ago

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We started this class by looking at how the cost of capital can be used to optimize the right mix of debt and equity. In effect, you estimate the costs of debt and equity at different debt ratios, and try to find the mix of debt and equity that minimizes your cost of capital. If you want to try your hand at using the spreadsheet to optimize debt ratio, try the following:
http://www.stern.nyu.edu/~adamodar/pc/capstru.xlsx
We will continue with this discussion next class. looking at limits to the approach, and variants

Slides: nyu.box.com/s/bdtnk9929ndg1244jtocavcy7tara86m
Post class test:
https://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session17test.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session17soln.pdf