The mix of debt and equity financing used by an organization is called its capital structure. Many managers struggle with finding a balance between t

The mix of debt and equity financing used by an organization is called its capital structure. Many managers struggle with finding a balance between these two options. It is a critical decision, as it impacts the organization’s assets, liabilities, and bottom line.

There is a cost associated with raising money to finance capital projects (cost of capital). The main objective is to minimize the cost of capital. 

• What approach would you use to determine the optimal capital structure? Defend your position.
• Be sure to respond to at least one of your classmates’ posts, comparing and contrasting the different approaches to the memorandum.