Capital Structure (2025 CFA® Level I Exam – Corporate Issuers – Learning Module 6)

Master Capital Structure for the CFA® Level I Corporate Issuers exam with AnalystPrep. In this CFA Level I lesson, we explain how companies make financing decisions using debt and equity, how capital structure affects firm value, and how concepts such as weighted average cost of capital (WACC), Modigliani-Miller propositions, tax shields, financial distress costs, and target capital structures are tested on the CFA exam. This lesson helps CFA candidates understand the relationship between financing decisions, cost of capital, and shareholder value. What you'll learn: ✓Debt vs equity financing and how companies choose their capital structure ✓Component costs of capital: cost of debt and cost of equity ✓How to calculate and interpret weighted average cost of capital (WACC) ✓Factors affecting capital structure decisions ✓Differences between capital-intensive and capital-light businesses ✓How company life cycles influence financing decisions ✓Modigliani-Miller Proposition I and Proposition II ✓The impact of taxes and the debt tax shield ✓Financial distress costs and optimal capital structure ✓Target capital structure and pecking order theory ✓How free cash flow theory explains debt decisions Chapters: 00:00 Introduction to Capital Structure 00:37 Debt vs Equity Financing Decisions 03:57 Component Costs of Capital 05:28 Weighted Average Cost of Capital (WACC) 11:45 Factors Affecting Capital Structure 16:04 Capital Intensive vs Capital Light Businesses 19:15 Capital Structure Across the Company Life Cycle 23:40 Macroeconomic and Industry Factors Affecting Capital Costs 29:06 Modigliani-Miller Capital Structure Theory 31:30 MM Assumptions and Proposition I 36:51 MM Proposition II and Cost of Equity 45:43 Capital Structure with Taxes and Tax Shield 54:08 Financial Distress Costs and Optimal Capital Structure 1:03:35 Target Capital Structure 1:07:37 Pecking Order Theory and Free Cash Flow Theory Prepare smarter for the CFA® Program with AnalystPrep: CFA Level I:https://analystprep.com/shop/cfa-leve... CFA Level II:https://analystprep.com/shop/cfa-leve... CFA Level III:https://analystprep.com/shop/cfa-leve... Follow AnalystPrep for more CFA® and finance education content: Facebook:   / analystprep   Instagram:   / analyst_prep   LinkedIn:   / analystprep   #CFA #CFALevel1 #CFAExam #CorporateIssuers #CapitalStructure #WACC #FinanceEducation #AnalystPrep