The document discusses capital structure and the weighted average cost of capital (WACC). It states that in a perfect capital market with rational investors where debt can be raised at the risk-free rate, there is no optimal or "idle" capital structure where the WACC is minimized.

2. Iqra zulfqar
Kiran Naveed

19. 1. Relevant
2 . Debt increases
3.Degree of equity decreases

21. Firm can make idle capital structure at which
the cost of capital will be lower

24. Idle capital structure is where WACC is
minimum

26. 1.Capital market is perfect
2. Investors are rational
3.Debt raise at free risk rate

28. There is no Idle capital structure