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# Capital Structure and Firm Value

### Optimal Capital Structure

Using your knowledge about the determinants of an optimal capital structure, discuss the choice of capital structure of the three companies: Anheuser Busch, Cisco and Disney (attached are their Balance Sheet Ratios). To keep your work focused on the problem, please consider the following topics: Capital structure: relativ

### The answer to Optimal capital structure

Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%; Equity = 60%; EPS = \$2.95; Stock price = \$26.50. b. Debt = 50%; Equity = 50%; EPS = \$3.05; Stock price = \$28.90. c. Debt = 60%; Equity = 40%; EPS = \$3.18; Stock price = \$31.20. d. Debt = 80%; Equity = 20%; EPS = \$3.42; Stock price

### Differences in a Functional Structure and Multidivisional structure

What are the principal differences between a functional structure and a multidivisional structure? Why does a company change from a functional to a multidivisional structure?

### The capital structure decision and the cost of capital for Ford, Disney, and Electronic Arts

Please help me with this. 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. Using Ford, Disney, and Electronic Arts, discuss the business nature of each. What are each of the company's beta

### Structure and Strategy

In your opinion, if a conflict existed in a company between structure and strategy, which would prevail? Which should prevail? Why?

### Optimal capital structure for firms in cyclical industries

The optimal capital structure for firms in cyclical industries should contain _______debt than firms in stable industries. A) more B) less C) an equal amount of D) None of the above. There is nor relationship between cyclical nature of an industry and optimal capital structure.

### Principal differences between functional & multidivisional structure

Explain the principal differences between a functional structure and a multidivisional structure? What are the contributing factors that motivate companies to change from a functional to multidivisional structure? Define the function of integrating roles in the organization and how integration factors shape the process. a

### Graphic representation of stock market data

See attachments. 1. Assignment: Graphic Representation â€¢ Choose a data source and create a graph or table that illustrates a story behind the data. You may choose a single data set (e.g. a stock price) or a number of data sets (e.g. population numbers over time in four major cities.) â€¢ Use the following sites as su

### Medallion Cooling Systems: EPS at each level of debt, Optimal capital structure

(Use \$50,000 and \$60,000 as EBIT) Integrative Optimal capital structure Medallion Cooling Systems, Inc., has total assets of \$10,000,000, EBIT of \$2,000,000, and preferred dividends of \$200,000 and is taxed at a rate of 40%. In an effort to determine the optimal capital structure, the firm has assembled data on the cost o

### Asymmetric information theory of capital structure

Which of the following statements concerning the asymmetric information theory of capital structure is false? a. If outside funds are required, managers would issue new common stock if they believe their stock is overvalued. b. If outside funds are required, managers would issue debt when they believe their stock is underv

### Factors that influence a firm's capital structure decision

List several factors that influence a firm's capital structure decision. Which one is the most important? Why?

### Questions on organizational structure

What are organizational structures and how does structure affect technology decisions? What is a centralized, decentralized, bureaucratic, or flat organizational structure? How does a strategic alignment model address both the internal and external IT domains? How useful is this model for organizations? What are some bene

### EBIT/EPS analysis

I need help with capital structure - here is an example... current proposed total assets 150 million 150 million debt 25 million 100 mill

### Why distinguish between paid in capital and earned capital; which is more important

Write a paper regarding owners equity and include in the paper: 1. Why is it important to keep paid-in capital separate from earned capital? 2. As an investor, is paid-in capital or earned capital more important? Why? 3. As an investor, are basic or diluted earnings per share more important? Why?

### capital structure and EPS

How can a corporation adjust their capital structure to improve their EPS (Earnings per share)? Find an example of a corporation that recently reproted their EPS. Any indication that their corporate structure affected the reported EPS?

### If the company makes this change, what would be the total market value (in millions) of the firm?

A consultant has collected the following information regarding Young Publishing: Total assets \$3,000 million Tax rate 40% Operating income (EBIT) \$800 million Debt ratio 0% Interest expense \$0 million

### What is the total change in cash for the firm?

The net income of the company is \$120. Accounts payable increase by \$20, depreciation is \$15, and equipment is purchased for \$40. If the firm issued \$110 in new bonds, what is the total change in cash for the firm for all activities?

### Acme is also considering the acquisition of a firm in the Czech Republic and would like your opinion on this. It plans to operate the firm for 3 years and then reevaluate the holding. The detailed answer of all the questions has been done.

Acme is also considering the acquisition of a firm in the Czech Republic and would like your opinion on this. It plans to operate the firm for 3 years and then reevaluate the holding. Free Cash flows are estimated as follows: Ã¢?Â¢ Year 1 - 38.63M Czech Koruna (CZK), Year 2 - 44.33 M CZK, Ã¢?Â¢ Year 3 - 50.48M CZK Ã¢?Â¢ Th

### Wk5 - 2

The development of the new issue junk bond market had important implications for capital structure choice. The existence of a viable junk bond market means that firms can comfortably maintain higher degrees of leverage than they could prior to the development of this market. Do you agree or disagree? Justify your answer.

### Debt Ratings and Capital Structure

#1 Explain why selecting a target senior debt rating is a reasonable approach to choosing a capital structure. Explain why a target senior debt rating of single-A is a prudent objective when there is only a very limited new issue market for non-investment-grade debt, and when investor willingness to purchase triple-B-rated debt

### Compare and discuss the two theories of capital structure; three theories of Dividends

BADM 621 You are a controller or a CFO of DuPont Corporation and you have two major decision: 1. You determine the capital structure of your company; therefore you must compare the two theories of capital structure and determine what mix of capital structure your company. 2. Your second decision the recession has hit yo

### What is the most recent litigation brought by the SEC against a public firm or against an accounting firm?

What is the most recent litigation brought by the SEC against a public firm or against an accounting firm? What is the most recent Staff Accounting Bulletin that provides guidance to the profession? What was the guidance given? Would you want to work for a large corporation that is subject to SEC oversight? Large corporatio

### Organizational Structure

You are hired as the HR consultant for a popular restaurant known for its efficient production process and good food. However, some glitches in serving customers have been reported to the management. These glitches can only be attributed to personnel error. You have been hired to re-design the organizational structure and var

### Investor provided Operating Capital

Current Assets = \$1.500,000 Net Fixed Assets = \$3,000,000 CUrrent Liabilities = \$600,000 Including \$300,000 of accounts payable, \$200,000 of 6% short term notes payable and \$100,000 in accurals \$1,500,000 of long term bonds \$300,000 of common stock \$1,750,000 of retained earnings What was total amount of investor provide

### Comparing and contrasting debt and equity financing

Prepare a paper comparing and contrasting debt and equity financing. In your paper, discuss the following questions: What is debt financing? Provide at least two examples. What is equity financing? Provide at least two examples. Which alternative capital structure is more advantageous? Why? Be sure to properly cite re

### Work breakdown structure

Can you help me get started with this assignment? Create a simple work breakdown structure (WBS) of whatever you wish. Use Word/Visio/PowerPoint - whatever you are comfortable with. Thanks!

### Calculate the beta when market fluctuates

19. Suppose the market portfolio is equally likely to increase by 30% or decrease by 10%. a. Calculate the beta of a firm that goes up on average by 43% when the market goes up and goes down by 17% when the market goes down. b. Calculate the beta of a firm that goes up on average by 18% when the market goes down and goes

### Discussion - Superior Living, Inc

Scenario: Superior Living, Inc. is a private, domestic US manufacturer of home furniture targeted at US consumers ages 21 to 54 (from first time apartment renters to empty nesters). The company generates US\$250 million in revenues from six product lines: outdoor patio, luxury, durable rental, children's furniture, rare woods, a

### Business and Financial Risk: Capital Structure Analysis

Please define business risk and financial risk. Explain their importance in capital structure analysis.

### Why should a firm use different costs of capital for different projects?

Why should a firm use different costs of capital for different projects?