On the premise of determining the enterprise's capital scale in advance, absorbing a certain proportion of debt capital shows that the total capital remains unchanged, but it increases the debt ratio and reduces the equity ratio. The cost of debt capital is lower than that of equity capital, and the increase of the proportion of low capital cost will reduce the weighted average cost of capital. Moreover, under the condition of not excessively increasing debt, the increase of the cost of equity capital is small, which leads to a small increase of the weighted average cost of capital, so the weighted average cost of capital of the final enterprise may be reduced.
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