OPTIMAL CAPITAL STRUCTURE INTRODUCTION This report tries to visualize “OPTIMAL CAPITAL STRUCTURE” and represent the facts that include features of capital structure‚ determinants of capital structure‚ and patterns of capital structure‚ types and theories of capital structure‚ theory of optimal capital structure‚ risk associated with capital structure‚ external assessment of capital structure and some assumption related to capital structure. BROAD OBJECTIVE • To determine features of capital structure
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Capital Structure and Profit Capital Structure Definition A unite of a company’s long-term debt‚ specific short-term debt‚ common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds. Debt comes in the form of bond issues or long-term notes payable‚ whereas equity is classified as common stock‚ preferred stock or retained earnings. Also‚ Short-term debt such as working capital requirements is considered
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Capital Structure Practice Problems 1. Hayfin Enterprises has the following operating results and capital structure: Hayfin Enterprises ($000s) | | | Financial Data | | Revenue | $ 6‚000 | Operating Expenses | $ (4‚500) | EBIT (Operating Profit) | $ 1‚500 | | | Debt | $ 1‚200 | Equity | $ 8‚800 | Total Capital | $ 10‚000 | Interest rate on debt = 9% Share price = $25 (MV = BV) The firm is contemplating
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B.A. 142 CASE 2 EXECUTIVE SUMMARY E. I. du Pont de Nemours is an American chemical company that has recently acquired the major oil company of Conoco Inc. and is becoming one of the largest chemical manufacturers in the United States. Its financial conservatism has pushed Du Pont to the forefront of the industry as its profitability soared‚ providing it with the liquidity to readily finance its cash needs. But several competitive conditions posed a challenge to its risk averse financial
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CASE DESCRIPTION The primary subject matter of this case concerns receivables management. Secondary issues examined include the impact of a client’s financial distress on a firm’s cashflows; the use financial accounting data to challenge a firm’s going concern principle and the formulation of new business strategies when the unexpected happens to a firm. The case is appropriate for first year graduate level. The case is designed to be taught in two class hours and is expected to require five
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The Armstrong Production Company is an industry-leading firm in the field of manufacturing synthetic building materials for homes and commercial structures‚ based near St. Louis. Armstrong was fortunate in its initial stages to quickly secure inexpensive funding in the form of developmental loans issued by the State of Illinois‚ and thus was able to break even within three years of its founding in the early 1970s. Able to pour resources into its research and development segment‚ riding on the increasing
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results have been possible through the policies and the indispensable role of the policy makers‚ i.e. management who have taken State Bank of India to become one of the most prestigious & promising banks of India. The policies pertaining to Capital Structure & Dividend policy play a major role in the successful and efficient working of the bank. The objectives of the bank are the criteria for a bank to frame its policies. And it is very much clear that the objectives and the policies at SBI go
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attorney’s fees and costs. On March 9‚ 2010‚ the 11th Senate of the German Federal Supreme Court ruled in the plaintiff’s favor in one of these cases‚ and held Pershing liable for a German broker-dealer’s tortious acts. In subsequent cases‚ the Supreme Court continued to rule in the plaintiffs’ favor. In December 2011‚ Pershing settled the majority of the cases. Lyondell Litigation As previously disclosed‚ in an action filed in New York State Supreme Court for New York County‚ on Sept. 14‚ 2010‚ plaintiffs
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Nike‚ Inc.: Cost of Capital Case 15 Financial Administration FINC 5713-180 Team 1 Fall 2013. October 8‚ 2013. Introduction Kimi Ford a portfolio manager at NorthPoint Group which is a mutual-fund management firm‚ is considering to buy some shares from Nike‚ inc even if it’s share price had declined from the beginning of the year‚ for the Northpoint Large-cap fund she managed which invested mostly in Fortune 500 companies and it was doing well despite the decline
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Revlon Inc. Case Study: 1). Introduction History: Revlon is a universal company that sells products for skin care‚ cosmetics‚ personal care‚ fragrance and professional products. It was founded in 1932 and began in the nail polish market‚ soon after expanding into lipstick. Over the past six years‚ Revlon has consistently lost revenue and struggled with debt. Even though they have eliminated executive positions‚ reduced staffing and consolidated sales and marketing functions to save an approximate
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