Search Our Essay Database

Essay Instructions: Capital Structure Decision and the Cost of Capital

In simple words, the capital structure is the combination of debt and equity used to finance a company. The background readings of this Module provide plenty of information regarding both the issue of the capital structure decision and the concept of the weighted average cost of capital.

For the Module 4 Case Assignment, please consider the following three companies:

i) eBay (EBAY),

ii) The Clorox Company (CLX), and

iii) Darden Restaurants (DRI).

Ebay Inc. (2011). Investor relations. Retrieved November, 2011, from http://investor.ebay.com

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), please use the following websites: http://ca.finance.yahoo.com/q?s=EBAY&ql=0 ; http://ca.finance.yahoo.com/q/ks?s=EBAY

The Clorox Company (2011). Investors. Retrieved November, 2011, from http://investors.thecloroxcompany.com/

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), please use the following websites: http://ca.finance.yahoo.com/q?s=CLX&ql=0 ; http://ca.finance.yahoo.com/q/ks?s=CLX

Darden Restaurants Inc. (2010). Investor relations. Retrieved November, 2011, from

http://investor.darden.com/

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), please use the following websites: http://ca.finance.yahoo.com/q?s=DRI&ql=0 ; http://ca.finance.yahoo.com/q/ks?s=DRI

Please explore the websites of the above companies, read the information in the background material, look for more, and then write a 5 pages report by responding to the following tasks:

Upon reviewing total debt/equity ratios, company betas, profitability ratios, company revenue, assets, and liabilities, and the nature of the operations of the companies including the nature of their customers and products, what would you recommend should the capital structure (total liabilities or debt and equity proportions) be for each of the three companies?

In your report, please include the information such as:

? The nature of the business in brief (all three companies)

? Total current assets and long-term assets of all three companies

? Total current liabilities and long-term liabilities of all three companies

? Revenue of each company

? Total debt/equity ratios of all three companies

? Profit margin, return on assets, and return on equity ratios of all three companies

? Betas of all three companies

? The riskiness of all three companies in brief (e.g., the higher the beta, the higher the risk)

? The advantages and disadvantages of debt over equity financing

Essay Instructions: Mod 4 case info
Request Serban as writer please use apa and cite references in text
In simple words, the capital is the combination of debt and equity used to finance a company. The background readings of this Module provide plenty of information regarding both the issue of the capital structure decision and the concept of the weighted average cost of capital.
Consider three companies: Goodyear, Campbell Soup, and Hewlett Packard. Reflect on the nature of the business of these three companies. You are recommended to also get to the web site of one company in each of these categories. You might also check what the beta of each of these companies is.
Based on the readings of the Module, and upon reviewing the nature of the operations of the companies including the nature of their customers and products, what would you recommend should the capital structure (total liabilities or debt and equity proportions) be for each of the three companies?
Note that you are not asked to provide specific numbers, just 'low debt ratio', 'medium debt ratio' or 'high debt ratio'. (Do not quote the actual company's capital structure or their debt-to-equity ratios as per their balance sheet.)
Write a five page paper explaining your recommendations for each of these three companies. Consider the nature of their business, the riskiness of the company, and the advantages and disadvantages of debt over equity financing in your answers.
?Describe the purpose of the paper and conclusion.
?Answer the case assignment questions clearly and provide necessary details. Your very first paragraph should include a direct answer to the assignment question, with the body of your paper focused on defending your answer. See the attached Tips for Good Writing for more detail on these expectations.
?Provide a quality argument; that is, no poor sentence structure, no spelling and grammar mistakes or run-on sentences.
?Provide citations to support your argument and references on a separate page. Please use APA format to provide citations and references [http://owl.english.purdue.edu/owl/resource/560/01/ ; ?Answer all the case assignment questions in an essay format instead of point format. Please do not type questions in the paper.
?Type and double space the paper.
Required/Case Assignment Readings:
Damodaran, A. (2005). Finding the right financing mix: The capital structure decision. Retrieved February, 2011, from http://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/capstr.pdf
Peavler, R. (2011). Debt and equity financing. Retrieved February, 2011, from http://bizfinance.about.com/od/generalinformatio1/a/debtequityfin.htm
Welsh, I., (1996). A Primer on Capital Structure. The John E. Anderson Graduate School of Management, University of California, Los Angeles.
This Chapter on the Capital Structure Decision is a very good overview. Try to grasp the key concepts. Focus on concepts that involve the tradeoffs between debt and equity. The chapter is an excellent review and it is really worth reading.
Gold, J. (2006). Reducing a Company's Beta- A Novel Way to Increase Shareholders Value,
Journal of Applied Corporate Finance, 18(4) (Fall).
Harvey, C. (1995). The capital structure and payout policy, WWWFinance. Retrieved February, 2011, from http://www.duke.edu/~charvey/Classes/ba350/capstruc/capstruc.htm

Essay Instructions: Hello, this is 'Corporate Financial Strategy' module Masters in Finance level assignment.
Section B- Reflective writing.
TOPIC is:
Is there such thing as an optimal capital structure for a company and does the payment of a dividend matter in the 21st century?
Discuss with reference to the leading corporate finance theories in the context of real life experience.

There is no specific source , you can use this book "Principles of corporate finance' Global edition, Brealey,Myers, Allen

Essay Instructions: In simple words, the capital structure is the combination of debt and equity used to finance a company. The Background reading for this module provides plenty of information regarding both the issue of the capital structure decision and the concept of the weighted average cost of capital.

For the Module 4 Case Assignment, consider the following three companies:

i) eBay (NasdaqGS: EBAY)

ii) The Clorox Company (NYSE: CLX)

iii) Alaska Air Group Inc. (NYSE: ALK)

Ebay Inc. (2012). Investor relations. Retrieved May 2012 from http://investor.ebay.com

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), use the following websites: http://ca.finance.yahoo.com/q?s=EBAY&ql=0 ; http://ca.finance.yahoo.com/q/ks?s=EBAY

The Clorox Company (2012). Investors. Retrieved May 2012 from http://investors.thecloroxcompany.com/

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), use the following websites: http://ca.finance.yahoo.com/q?s=CLX&ql=0 ; http://ca.finance.yahoo.com/q/ks?s=CLX

Alaska Air Group, Inc. (2012). Investor relations. Retrieved May 2012 from http://phx.corporate-ir.net/phoenix.zhtml?c=109361&p=irol-IRHome

To access company background information, ratios analysis (e.g., debt/equity ratio, profitability ratios, etc.), and other information (e.g., company beta), use the following websites: http://ca.finance.yahoo.com/q?s=ALK&ql=1 ; http://ca.finance.yahoo.com/q/ks?s=ALK

To complete the Module 4 Case Assignment, explore the websites of the above companies, read the information in the background material, search for more information, and then write a 5-page report responding to the following tasks:

1) Based on the readings of the module and upon reviewing total debt/equity ratios, company betas, profitability ratios, company revenue, assets, and liabilities, and the nature of the operations of the companies, including the nature of their customers and products, what would you recommend to be the capital structure (total liabilities or debt and equity proportions) for each of the three companies?

In your report, include the information along with other information that you think is necessary to answer the above question. Consider the following:
?The nature of the business in brief (all three companies).
?Total current assets and long-term assets of all three companies.
?Total current liabilities and long-term liabilities of all three companies.
?Revenue of each company.
?Total debt/equity ratios of all three companies.
?Profit margin, returns on assets, and return on equity ratios of all three companies.
?Betas of all three companies.
?The riskiness of all three companies in brief (e.g., the higher the beta, the higher the risk).
?The advantages and disadvantages of debt over equity financing.

2) What do you perceive you have learned in the Module 4 Case Assignment? Which of the following learning outcomes do you feel you have mastered?
?Explain and demonstrate the use of bonds and other debt instruments in financing the firm's capital plans.
?Discuss the advantages and disadvantages of debt financing and of equity financing.
?Identify and discuss the concept of optimal capital structure.

Provide a brief evaluation of the Module 4 Case Assignment.

Note: Your report/assignment will not be accepted without proper citations and references. You must use the sources from the background material together with the sources you find on your own. It is also required that you answer all the questions related to learning outcomes.

Case Assignment Expectations

In the Module 4 Case Assignment, you are expected to:
?Describe the purpose of the report and provide a conclusion.
?Answer the Case Assignment questions clearly and provide necessary details. The first paragraph should include a direct answer to the assignment question, with the body of the paper focused on defending your answer. Review ?Tips for Good Writing? [https://cdad.trident.edu/CourseHomeModule.aspx?course=56&term=92&module=3&page=custom1] and a guideline to write a well-structured paper.
?Provide a quality argument?that is, no poor sentence structure, no spelling and grammar mistakes, and no run-on sentences.
?Provide citations to support your argument and references on a separate page. Use APA format to provide citations and references [http://owl.english.purdue.edu/owl/resource/560/01/].
?Answer all the Case Assignment questions in an essay format. Do not type questions in the paper.
?Type and double-space the paper.

The following criteria will also be used to assess your paper:

>Precision: Does the paper address the question(s) or task(s)?

>Breadth: Is the full breadth of the subject addressed?

>Depth: Does the paper/report address all elements of the topic in sufficient depth? Does it include and apply the background reading and other background resources? Are they included as references?

>Critical thinking: Are the concepts of this module applied accurately, logically, and relevantly?

>Organization: Is the paper organized in a coherent and systematic manner? Are headings included in all papers longer than two pages?

>Clarity: Is the writing clear and are the concepts articulated properly? Are paraphrasing and synthesis of concepts the primary means of response to the questions, or are thoughts conveyed through excessive use of quotations?