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Capital Structure Optimization
The process of restructuring a company�s debt and equity mix to reduce costs and maximize shareholder value, often part of the post-merger integration strategy.
Implications
The process of adjusting a company�s mix of debt and equity to minimize the cost of capital and maximize shareholder value, often involving analysis of financial ratios and market conditions.
Example
Example: A corporation undertakes capital structure optimization by refinancing high-interest debt and issuing new equity to reduce overall financing costs.
Related Terms
Different from capital allocation, which focuses on where to invest capital, optimization focuses on how to finance the company effectively through the right mix of debt and equity.
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