Tui Mod 4 Case

937 WordsSep 2, 20124 Pages
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 should the capital structure (total liabilities or debt and equity proportions) be for each of the three companies? I don’t know how to even answer this question and it makes me frustrated. 2) In your report, please include the information together with other information that you think is necessary to above question: 3) ●The nature of the business in brief (all three companies) Ebay – “World’s largest online marketplace” Where anyone can sell or…show more content…
14) ☼Discuss the advantages and disadvantages of debt financing and of equity financing Advantages to debt financing is that the debt gets paid off and the risk that you invest in will end up helping pay off the debt. Disadvantages is that if there is no high risk then the amount of return is not as high. Also the company’s stock may fall and put the person more into debt. 15) ☼Identify and discuss the concept of optimal capital structure In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include dozens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e.g. by taking a short term loan etc. – Take what you can from this. 16) Please provide your evaluation of the Module 4 Case Assignment in brief. Case 4 was an introduction to applying my knowledge to statistics on the way a company operates when invested into.

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