Adjusted Present Value for Optimizing Debt
Originally published: 20/06/2016 10:35
Last version published: 25/01/2017 12:13
Publication number: ELQ-15768-2
View all versions & Certificate

Adjusted Present Value for Optimizing Debt

Estimate an "optimal" Capital Structure for a company using the Adjusted Present Value Approach.

The excel model spreadsheet summary provides a picture of your firm's current cost of capital and debt ratio, and compares it to your firm's value at every debt ratio, incorporating the tax benefits from debt & the expected bankruptcy costs at each level of debt.

This spreadsheet allows you to compute the optimal capital structure for a non-financial service firm.

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (

This Best Practice includes
1 Excel Model File

Prof. Aswath Damodaran offers you this Best Practice for free!

download for free

Add to bookmarks




More Best Practices from Prof. Aswath Damodaran

See all

Any questions on Adjusted Present Value For Optimizing Debt?

The user community and author are here to help. Go ahead!

4.7 / 5 (11 votes)

please wait...