How Can Business Leaders Optimize the Cost of Capital?
Business leaders can take several steps to optimize the cost of capital:
Debt management: Refinancing high-interest debt with lower-cost options can reduce the overall cost of capital. Equity financing: Issuing equity can be more cost-effective than taking on additional debt, especially if the company's stock is highly valued. Risk management: Implementing strategies to mitigate business and financial risks can lower the cost of equity and debt. Tax efficiency: Utilizing tax shields and other tax optimization strategies can reduce the after-tax cost of capital.