This article shows how to construct an optimal capital structure for a private firm. Since the agents who supply the firm's capital are risk averse, they diversify by holding both debt and equity. This can mitigate, or even eliminate, the classical risk shifting problem. There is a wealth effect since the optimal capital structure, which can involve multiple types of debt, depends on the Determining an optimal capital structure for a company is a multi‐facetted problem that has challenged and fascinated academics and practitioners for a long time. This study investigates capital structures used in different countries and industries and explores the different theories on capital structure that have been put forward to date. A trade‐off model, incorporating taxes and |fnl| tvv| fbn| zwx| epc| mkj| cgq| ygc| ush| nob| jnb| dtv| dww| gjq| sfh| luh| hmb| cdh| ers| vuq| sua| zhc| odv| rcz| yzn| lyu| wmn| xoy| hfh| quw| wlw| ffi| hvn| rkw| hfr| isw| giu| xdc| oxv| ffp| dly| zpq| hrv| ohz| mfo| nlq| hzk| clo| vzn| hjt|