Understanding Finance's video: The Capital Structure Decision and Other Issues James Tompkins

This is the fifth lecture in the "Advanced Corporate Finance" series in which I conclude the final lecture related to the capital structure decision. What are the most important considerations when a firm is choosing whether or not to have debt and if so how much? For example, does it matter if the firm is in a high or low risk business, or are there other characteristics of the firm's business that are relevant to the capital structure decision? What about the risk of bankruptcy or financial distress? Can capital structure changes signal any information about the firm? When should a firm consider short-term debt as opposed to long-term debt? What about private debt such as borrowing from a bank as opposed to issuing debt in the capital markets? These are all issues I address in this lecture, and I conclude with a comment by a Fortune 100 company Treasurer as she and the Chief Financial Officer consider their capital structure decisions for the firm.