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  5. Traditional Theory of Capital Structure

Traditional Theory of Capital Structure

Definition of 'Traditional Theory of Capital Structure'

The theory that an optimal capital structure exists, wher the WACC is minimised and market value is maximised.

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Related Terms

Modigliani & Millers (MM) Capital Structure TheoriesReturn on Capital EmployedTraditional OptionAPTEvolutionary Theory of the FirmUnbiased Forward Predictor TheoryCapital GearingMarginal Cost of CapitalExpansion CapitalCapital StructureCapitalisation IssueOptimal Capital StructureStructureCapital Asset Pricing ModelInternational (or Open) Fisher TheoryEconomic Value AddedBig BangExpectations Hypothesis of the Term Structure of Interest Rates (Yield Curve)Financial RiskGeneral Partners

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