The appropriate objective for capital structure decisions is to maximize the equity value by minimizing the WACC. Unfortunately, exactly how this goal is to be achieved remains an unsettled issue in Finance. Many of the factors affecting this decision are well understood and are discussed in this chapter; however, the interplay among these factors is complex and not as well understood. To comprehend the issues involved in the capital structure decision, it is essential to remember the key point: whether the way a firm chooses to finance its assets make any economic difference.