Corporate Finance Essentials

Why capital structure matters; business risk vs financial risk; cost of debt vs cost of equity intuition; WACC conceptually and what drives it; leverage trade-offs (tax shield vs distress risk); how these ideas show up in interviews (optimal leverage, should we lever up?).

Financing choice logic: dilution vs fixed obligations; use cases for debt vs equity (growth, acquisitions, recapitalizations); basic instrument differences (senior debt, revolver, mezz, preferred); covenants and flexibility intuition; rating/market conditions at a high level for interview answers.

Capital allocation framework: reinvest, repay debt, pay dividends, buy back shares, acquire; when each makes sense; signaling and valuation effects; buybacks vs dividends; shareholder yield intuition; interview-style questions around what should this company do with excess cash? and trade-offs.

Core return metrics and when to use them: IRR vs MOIC, time value of money intuition, reinvestment assumptions; ROIC and value creation (ROIC vs WACC); links to decision-making (projects, acquisitions, portfolio choices); common interview calculations and interpretation questions (good vs bad IRR, comparing deals).