However, when the ratio of debt capital and equity increases, the impact of the loan rate and the total capital required for CSH increase their income requirements (ie the cost of equity capital increase). At a ratio of debt capital and equity capital is high, the cost of debt also increased because now the possibility of default is higher (higher risk of bankruptcy). So, in the ratio of debt capital and equity higher WACC will increase.
đang được dịch, vui lòng đợi..