Explore BrainMass

Explore BrainMass

    Optimal Fraction of Debt

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Define the optimal fraction of debt and the growth rate of a firm. What is the relationship between the two?

    © BrainMass Inc. brainmass.com June 4, 2020, 3:47 am ad1c9bdddf
    https://brainmass.com/business/interest-rates/534460

    Solution Preview

    The optimal fraction of debt has an inverse relationship with a firm. As the firm grows larger, the optimal fraction of debt decreases. When the firm is smaller, the optimal fraction of debt remains large because the firm relies more ...

    Solution Summary

    This solution explains the optimal fraction of debt and growth rate of a firm. The relationship between both elements is also discussed.

    $2.19

    ADVERTISEMENT