 Capital Budgeting Decisions: The End of the Roads Meets the Beginning of AnotherMark K. Pyles
Chapter Chapter 9 in Applied Corporate Finance, 2014, pp 285-315 from Springer Abstract: Abstract As promised, we are at long last to the end of our journey. After the long, tedious task of determining the WACC, we now just have to use it. While the hard part is over, arguably the most important step is yet to come. As stated several times, in order for a company to flourish financially, they must maximize shareholder wealth, which they do, in part, by ensuring company growth. This growth most often comes about as a result of the company undertaking new projects. Thus, we have to decide which projects to accept, and which to reject, in order to maximize shareholder wealth. As you can probably ascertain, a large part of this goes hand in hand with the discussion of cost of capital completed in the previous chapter. To put is as simply as possible, the objective of this chapter is to find the best possible projects, conditional upon the optimal capital structure used to finance said project. Or, we are finally combining the concepts of capital structure and capital budgeting. Keywords: Cash Flow; Payback Period; Capital Budget; Optimal Capital Structure; Maximize Shareholder Wealth (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-1-4614-9173-6_9 Ordering information: This item can be ordered from DOI: 10.1007/978-1-4614-9173-6_9 Access Statistics for this chapter More chapters in Springer Texts in Business and Economics from Springer |
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