Drawing debt and equity
A graphical approach to teaching capital structure
Bibliographic Data
| ID | 22231104 |
|---|---|
| Authors | Joon Ho Hwang (0009-0008-7630-4074, Korea University), Heejin Yang (0000-0003-2479-459X, Dongguk University), Doowon Ryu (0000-0003-3625-817X, Kyung Hee University, corresponding author) |
| Year | 2026 |
| Publication date | 2026-06-26 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Humanities and Social Sciences Communications (JOURNAL) |
| Journal identifiers | ISSN: 2662-9992 • E-ISSN: 2662-9992 |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1057/s41599-026-08089-9 |
| OpenAlex | W7166071394 |
| Language | EN |
This paper presents a drawing-based pedagogical method to address some of the difficulties in teaching introductory finance. The approach uses payoff diagrams to visually deconstruct a firm’s total value into the distinct claims of debt (a senior, fixed claim) and equity (a residual claim). By starting with a simple drawing exercise, the intuitive graphical framework allows students to grasp the fundamental relationship between different types of financial claims and serves as a foundation for exploring advanced topics such as agency conflicts in risk-taking and the allocation of control rights
Capital structure · Debt · GRASP · Accounting Education and Careers · Accounting Theory and Financial Reporting · Innovations in Educational Methods
| Highly cited | No |
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