The case serves to motivate the following teaching objectives: 1. Introduce the Modigliani-Miller intuition of capital structure irrelevance; 2. Establish how the cost of equity is affected by capital structure decisions by defining financial risk and introducing the levered-beta capital asset pricing model (CAPM) equation; 3. Discuss interest tax deductibility and the valuation tax shields; 4. Explore the importance of debt capacity in a growing business.