Vendor Image

The Effects Of Debt Equity Policy on Sha...

Chaplinsky, Susan,...

Technical Note

The Effects Of Debt Equity Policy on Shareholder Return Requirements and Beta

Chaplinsky, Susan; Harris, Robert S.

F-1168 | Published April 1, 1997 | 16 pages Technical Note

Collection: Darden School of Business

Product Details

This note outlines the link between shareholder-return requirements and a firm's use of debt. It explores the theoretical arguments concerning how the cost of equity changes with the use of debt and discusses the limitations of each view. It also provides conceptual and practical guidance on the use of "levered" and "unlevered" betas.

0