Capital Structure and Cost: Mattel, Clorox and MGM Resorts International
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Capital structure and cost
Capital refers to the combination of debt and equity used to finance a company to purchase what they need to manufacture their products or provide services based on its operations ADDIN EN.CITE Baker20111(Baker & Martin, 2011)116Baker, H.K.Martin, G.S.Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practice2011New JerseyJohn Wiley & Sons9780470569528http://books.google.co.ke/books?id=lq69IY1P5tgC( HYPERLINK l "_ENREF_1" o "Baker, 2011 #1" Baker & Martin, 2011). In the following report, we consider three companies namely Mattel, Clorox and MGM Resorts International whose operations are different and make recommendations for their capital structure which refers to the way the companies finance their assets through combination of debt and equity while considering the nature of business, riskiness of each of the company and the advantages and disadvantages of debt over equity financing.
Mattel, Inc. is an international public company whose operations are the production toys and games therefore children are its target customers. Clorox is a US based company manufacturing various chemical and food products targeting households as the consumers of their products while on the other hand MGM Resorts International is a worldwide generosity firm dealing with hotels and casino to provide the services of entertainment, gambling and hotel facilities to tourists and locals who need the services.