Knowing what the investors demand enables the firm to plan its financing. What type of instrument should it use? Should it issue debt or equity? This lecture will introduce the concept of Capital Structure Theory which tells the manager how to reduce capital cost by a correctly chosen mixture of debt and equity. The composition of the mixture depends on how much tax the firm pays and how it can use its financing to reduce those taxes. This lecture was recorded by Professor Raghavendra Rau on 22nd January 2024 at Barnard's Inn Hall, London Raghu is the Mercers School Memorial Professor of Business He is also the Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School.
Gresham College lectured by Raghavendra Rau
