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Corporate Finance: Leverage & Financing Decisions

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Corporate Finance: Leverage & Financing Decisions

This course is part of Investment and Corporate Finance Specialization

Instructor: EDUCBA

Included with

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4 modules

Gain insight into a topic and learn the fundamentals.

9 hours to complete

Flexible schedule

Learn at your own pace

4 modules

Gain insight into a topic and learn the fundamentals.

9 hours to complete

Flexible schedule

Learn at your own pace

What you'll learn

Analyze operating, financial, and combined leverage impacts on earnings.
Apply EBIT–EPS analysis to compare financing alternatives.
Determine optimal capital structure by balancing risk and return.

Skills you'll gain

Details to know

Shareable certificate

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Build your subject-matter expertise

This course is part of the Investment and Corporate Finance Specialization

When you enroll in this course, you'll also be enrolled in this Specialization.

Learn new concepts from industry experts
Gain a foundational understanding of a subject or tool
Develop job-relevant skills with hands-on projects
Earn a shareable career certificate

There are 4 modules in this course

Learn how companies choose the right mix of debt and equity to maximize profitability and manage risk. Build practical skills in leverage analysis and EBIT–EPS decision-making used in corporate finance.

This course provides a structured approach to analyzing and optimizing corporate financing strategies. You will begin by understanding business risk and break-even analysis, learning how operational decisions impact financial performance and profitability. You will then explore operating leverage, financial leverage, and combined leverage to understand how changes in sales affect earnings and shareholder returns. The course also covers key tools used in capital structure decision-making, helping you evaluate financing options using real-world financial logic. A major focus of the course is EBIT–EPS analysis, where you will compare different financing alternatives and determine the most effective strategy. You will also learn how to calculate the indifference point to identify the EBIT level at which financing options yield the same earnings per share. By the end of the course, you will be able to confidently analyze financing decisions, balance risk and return, and optimize capital structure strategies in real business scenarios.

Module details

This module introduces the foundational concepts required to determine a firm's financing mix. Learners explore business risk, understand how operational decisions influence financial outcomes, and analyze break-even concepts that help firms identify the minimum sales level required to cover costs. By examining the relationship between selling price, costs, and profitability, learners build the analytical foundation necessary for capital structure decision-making.

What's included

6 videos4 assignments

6 videosTotal 47 minutes

Introduction to Determining the Financing mix6 minutes
Business Risk7 minutes
Break Even Point10 minutes
Firms Break Even Point12 minutes
Break Even Point and Selling Point7 minutes
Break Even Point and Selling Point Continues5 minutes

4 assignmentsTotal 60 minutes

Understanding Business Risk and Break-Even Foundations30 minutes
Introduction to Financing Mix Decisions10 minutes
Break-Even Fundamentals10 minutes
Break-Even and Sales Relationships10 minutes

This module explores the role of leverage in financial management and capital structure planning. Learners examine operating leverage, financial leverage, and combined leverage to understand how sales fluctuations affect profitability and shareholder returns. The module also introduces agency cost conflicts and highlights how managerial decisions influence the balance between risk and return in corporate financing strategies.

What's included

6 videos4 assignments

6 videosTotal 51 minutes

Operation and Combined Leverages11 minutes
Example of Operation and Combined Leverages7 minutes
Financial Leverages12 minutes
Example of Financial Leverages9 minutes
Relationship Between Operating6 minutes
Agency Cost Conflict7 minutes

4 assignmentsTotal 60 minutes

Leverage and Capital Structure Concepts30 minutes
Operating and Combined Leverage10 minutes
Financial Leverage and Risk Impact10 minutes
Operating Leverage Relationships and Agency Issues10 minutes

This module introduces the key tools used in capital structure decision-making and financing mix analysis. Learners examine debt and equity financing instruments, analyze EBIT-based decision tools, and evaluate how financial ratios and industry benchmarks guide strategic financing decisions. The module emphasizes analytical approaches used by financial managers to identify optimal financing structures.

What's included

6 videos4 assignments

6 videosTotal 52 minutes

Tools of Capital Structure9 minutes
Tools of Capital Structure Continues9 minutes
EBIT Difference Level9 minutes
EBIT EPS10 minutes
Financing Mix Solution8 minutes
Comparative Ratio Industry Norms7 minutes

4 assignmentsTotal 60 minutes

Capital Structure Tools and Financing Analysis30 minutes
Understanding Capital Structure Tools10 minutes
EBIT Analysis in Financing Decisions10 minutes
Financing Mix Decision Approaches10 minutes

This module focuses on advanced financial analysis techniques used in capital structure decision-making. Learners explore EBIT–EPS analysis and numerical methods used to compare financing alternatives. Through the concept of the indifference point, learners determine the EBIT level at which different financing plans produce equal earnings per share, enabling informed financial strategy decisions.