Choosing the Right Long-Term Financing Strategy

This video covers the following learning objectives:

General/All Certifications

✅ Explain why capital structure decisions impact profitability, risk, and operational flexibility
✅ Compare the characteristics, advantages, and disadvantages of debt and equity financing
✅ Understand how debt and equity influence ownership, control, and financial obligations
✅ Use Excel to model capital structure scenarios and calculate return on equity (ROE)

Canadian Securities Course (CSC)

✅ Identify common debt and equity securities used by companies to raise capital
✅ Explain how debt vs. equity decisions affect investor risk and return
✅ Understand the implications of capital structure for companies and investors

Certified Financial Planner (CFP) – Canada

✅ Compare debt and equity financing options for small businesses and individual clients
✅ Evaluate the trade-offs between financing costs, ownership dilution, and financial risk
✅ Guide clients in selecting appropriate long-term financing strategies

Financial Risk Manager (FRM)

✅ Assess how debt financing increases financial leverage and liquidity risk
✅ Understand the role of capital structure in overall risk management
✅ Evaluate the risks associated with high leverage, including insolvency and credit rating impact

Chartered Financial Analyst (CFA) – Level 1 & 2

✅ Compare the advantages and disadvantages of debt vs. equity financing
✅ Analyze the effects of capital structure on weighted average cost of capital (WACC) and shareholder value
✅ Calculate and interpret the impact of leverage on return on equity (ROE)
✅ Assess capital structure decisions in the context of risk-return trade-offs