• The optimal capital structure is the best combination of debt and equity financing, which maximizes the market value of the company with a minimum cost of capital.

  • Minimizing the weighted average cost of capital (WACC) is one way to optimize financing at the lowest cost.
  • According to some economists, in the absence of taxes, bankruptcy costs, agency costs and asymmetric information in an efficient market, the value of a firm does not depend on its capital structure.