Capital structure theory finance essay
Capital Structure: Capital structure is the way a company finances its overall operations and growth by using various sources of financing. Debt comes in the form of bond issues or long-term bonds. ABSTRACT. This article examines capital structure theories based on agency costs, asymmetric information, product input market interactions, and corporate control considerations, but excluding tax-based theories. For each type of model, a brief overview of the papers examined and their relationship to each other is provided. The cost of debt for Tesco is. 31 while that of equity. 65, Tesco annual report and financial This translates into the stock market value, £222. Tesco's WACC rests comfortably. 7, Deieda, 2007, p. 06. For comparison, Sainsbury's WACC is. 54.