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Dear Mike,
I just went through the 1st bit of chapter 19, “theory of Gearing”. And will study the rest of the chapter today. Mean while I had a small doubt poppingin my head.
As WACC may not necessarily be a smoot curve. It can be in any form, possibly even a zig-zag line. Well then is it quite possible to have more than 1 optimum level of gearing? Or is it always going to be 1 particular level?
Have you watched the free lecture on this chapter? (There is no point at all in using the notes without watching the lectures because it is in the lectures that I explain and expand on the notes).
I actually make the point in the lecture that although in theory it would be a nice smooth curve, it is irrelevant to the conclusion as to whatever shape it is.
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