Capital Structure Templates

Use one of our capital structure templates to determine the optimal capital structure for your company and maximize its profitability!
Weighted Average Cost of Capital (WACC) Excel Model Template Weighted Average Cost of Capital (WACC) Excel Model Template
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Weighted average cost of capital (WACC) is the required return a company should generate for the risk associated with investing…
Cost of Debt Excel Calculator Cost of Debt Excel Calculator
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The Cost of Debt Excel Calculator can be useful for debtholders and creditors. The cost of debt is the return…
Cost of Equity Excel Calculator Cost of Equity Excel Calculator
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This Cost of Equity Excel Calculator can be a useful tool for prospective investors. The cost of equity is the required…
Series A Preferred Share Analysis Series A Preferred Share Analysis
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The template analysis the return profile a Series A Preferred Shares Investment. The comprehensive analysis evaluates the impact of a…
Cost of Preferred Stock Excel Calculator Cost of Preferred Stock Excel Calculator
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This cost of preferred stock excel calculator lets you calculate the cost of preferred shares, given the stock price and…
Financial leverage
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The financial leverage is the use of borrowed money (debt) to finance the purchase of assets  with the exportation that…
NPV and IRR Calculator (Automatic) NPV and IRR Calculator (Automatic)
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After the cash flow for each period is calculated, the present value (PV) of each one is achieved by discounting its future value (see Formula)…
Cap Table and Exit Waterfall Tool for Excel and Google Sheets Cap Table and Exit Waterfall Tool for Excel and Google Sheets
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Create a capitalization table through multiple rounds of investments, and forecast how investment rounds impact ownership, dilution, and distribution of…
Restructuring Financial Model Template Restructuring Financial Model Template
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This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
NPV and IRR calculator NPV and IRR calculator
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This template calculates Net Present Value and Internal Rate of Return for an investment.You are expected to enter following inputs.…
Fundamental Analysis of Stock Market Fundamental Analysis of Stock Market
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The intrinsic value of an equity share depends on a multitude of factors. The earnings of the company, the growth…

Capital Structure Templates and Excel Models

What is Capital Structure

Capital structure is the proportion of debt and equity capital used to finance its assets, capital expenditures, acquisitions, investments, and daily operation. A common way to express the capital structure is by using leverage ratios such as the debt-to-equity ratio and debt-to-capital ratio.

Optimal Capital Structure

There are trade-offs between raising debt and equity to fund the business, and companies need to determine the optimal capital structure based on several criteria:

1. Weighted average cost of capital (WACC): WACC is the minimum rate of return a company must earn before generate value. This rate is calculated using a blended cost of capital across all sources including common shares, preferred shares, and debt. An optimal capital structure should result in the lowest WACC for the firm.

2. Risk and expected return: Debt investors expect a lower rate of return compared to equity investor for the lower risk they have to take. A firm has a lower cost of capital when it issues debt. On the other hand, equity investors take more risk because they only receive the residual value after debt investors claim their portion. Equity investors receive a higher rate of return, resulting in a great implied cost of equity when company issues equity than debt.