I’m studying for my Accounting class and need an explanation.
Before completing this activity, review Chapters 14 and 15 of your textbook. In this scenario, imagine that you are a financial analyst at the selected corporation for your final project, and one of your peers from a non-financial department is confused about why capital structure is important. You have been asked to explain the topic in terms that are not too technical. In an email to your peer, address the following points:
- Explain the meaning of capital structure, cost of capital, and weighted average cost of capital (WACC).
- Describe how capital structure and cost of capital affect the way that a company is valued by investors.
For additional details, please refer to the Module Four Journal Guidelines and Rubric document.