Assess the impact of a firm’s financing decisions on its capital structure and shareholder distribution policy

Assess the impact of a firm’s financing decisions on its capital structure and shareholder distribution policy

Select a publicly held company and analyze its capital-structure, applying the theories and principles learned in this module. The structure of your research paper should include: A preview of capital structure issues Business and financial risks related to capital-structure Modigliani and Miller’s [MM] capital-structure theory Criticisms of the MM model and assumptions Capital-structure evidence and implications Estimating the firm’s optimal capital-structure A firm’s optimal capital-structure is that mix of debt and equity that maximizes the stock price. At any point in time, management has a specific target capital structure in mind, presumably the optimal one, though this target may change over time. For example, financial management may choose a 50% equity financing [stock] and 50% debt [bond] financing. Several factors influence a firm’s’ capital structure, including: Business risk Tax position The need for financial flexibility Managerial conservativeness Growth opportunities Business risk is the riskiness inherent in the firm’s operations if it uses no debt. This report is intended to be a capital-structure analysis of your selected public company. Your paper is intended to be an executive summary of your analysis, and is limited to a minimum of 5–7 pages of text, excluding the title page, table of contents, graphs, charts, tables, etc. Competency Assessment criteria: Competency Assessment: Part 1: Analyze a company’s capital-structure, applying the theories and principles learned in this module. Competency Assessment: Part 2: Described Capital-structure evidence and implications Competency Assessment: Part 3: Described the criticisms of the MM model and assumptions Competency Assessment: Part 4: Work demonstrates a strong to exemplary comprehension of the Modigliani and Miller’s [MM] capital-structure theory Competency Assessment: Part 5: Student adequately addressed the following: Described the business and financial risks related to capital-structure Competency Assessment: Part 6: Analyzed several factors influencing a firm’s’ capital structure such as business risk, tax position, the need for financial flexibility, managerial conservativeness, and growth opportunities. Competency Assessment: Part 7: Presented an executive summary of the student’s analysis in the full of 5–7 pages of text, excluding the title page, table of contents, graphs, charts, tables, etc. Minimum Submission Requirements This Assessment should be a Microsoft Word (5-7 pages) document, in addition to the title and reference pages. Respond to the questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. Your paper should be highly organized, logical, and focused. Your paper must be written in Standard English and demonstrate exceptional content, organization, style, and grammar and mechanics. Your paper should provide a clearly established and sustained viewpoint and purpose. Your writing should be well ordered, logical and unified, as well as original and insightful. A separate page at the end of your research paper should contain a list of references, in APA format. Use your textbook, the Online Library, and the internet for research. Be sure to cite both in-text and reference list citations were appropriate and reference all sources. Your sources and content should follow proper APA citation style. Review the APA formatting and citation style found in the Writing Center.