Capital structure decisions can impact a company's profitability from "summary" of How Finance Works by Mihir Desai
Capital structure decisions are a crucial aspect of a company's financial strategy. These decisions involve determining the mix of debt and equity that a company uses to finance its operations. The way a company chooses to structure its capital can have a significant impact on its profitability. When a company decides to use more debt in its capital structure, it can benefit from the tax advantages of debt. Interest payments on debt are tax-deductible, which can lower the company's tax liability and increase its profi...
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