Financial Management

  1. Capital Structure and Leverage
    1. Leverage Concepts
      1. Operating Leverage
        1. Financial Leverage
          1. Combined Leverage
          2. Operating Leverage
            1. Fixed vs. Variable Costs
              1. Degree of Operating Leverage
                1. DOL Calculation
                  1. DOL Interpretation
                  2. Operating Breakeven Analysis
                    1. Breakeven Point
                      1. Margin of Safety
                      2. Business Risk
                        1. Sales Variability
                          1. Operating Risk Factors
                        2. Financial Leverage
                          1. Fixed Financial Costs
                            1. Degree of Financial Leverage
                              1. DFL Calculation
                                1. DFL Interpretation
                                2. Financial Breakeven Analysis
                                  1. EPS Breakeven
                                    1. EBIT-EPS Analysis
                                    2. Financial Risk
                                      1. Earnings Variability
                                        1. Financial Risk Factors
                                      2. Combined Leverage
                                        1. Degree of Total Leverage
                                          1. DTL Calculation
                                            1. DTL Interpretation
                                            2. Total Risk
                                              1. Operating and Financial Risk Interaction
                                            3. Capital Structure Theory
                                              1. Modigliani-Miller Propositions
                                                1. MM Proposition I
                                                  1. Without Taxes
                                                    1. With Corporate Taxes
                                                    2. MM Proposition II
                                                      1. Without Taxes
                                                        1. With Corporate Taxes
                                                      2. Trade-Off Theory
                                                        1. Tax Benefits of Debt
                                                          1. Financial Distress Costs
                                                            1. Optimal Capital Structure
                                                            2. Pecking Order Theory
                                                              1. Information Asymmetry
                                                                1. Financing Hierarchy
                                                                2. Market Timing Theory
                                                                  1. Market Conditions
                                                                    1. Timing of Security Issues
                                                                    2. Agency Cost Theory
                                                                      1. Agency Costs of Debt
                                                                        1. Agency Costs of Equity
                                                                      2. Factors Affecting Capital Structure
                                                                        1. Business Risk
                                                                          1. Tax Position
                                                                            1. Financial Flexibility
                                                                              1. Managerial Conservatism
                                                                                1. Growth Opportunities
                                                                                  1. Market Conditions
                                                                                    1. Industry Characteristics
                                                                                      1. Firm Size
                                                                                        1. Asset Structure
                                                                                        2. Optimal Capital Structure
                                                                                          1. Cost of Capital Minimization
                                                                                            1. Value Maximization
                                                                                              1. Practical Considerations
                                                                                                1. Industry Comparisons
                                                                                                  1. Target Capital Structure

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                                                                                                8. Cost of Capital

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                                                                                                10. Dividend Policy