Capital structure

Modigliani and Miller 's Capital Structure Theories The Modigliani-Miller theorem is the basis for modern thinking on capital structure. The basic theorem that, under certain market process (the classical random walk), in the absence of taxes, bankruptcy costs and asymmetric information, i.e., in an efficient market, the value of a company is not affected by the way the company is financed. No matter whether the capital of the company is obtained with the issue of shares or debt. No matter what the

MODERN FINANCE CAPITAL STRUCTURE The capital structure of a company refers to the mixture of equity and debt finance used by the company to finance its assets. Capital structure is the proportion of firm’s value financed with debt. Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock, preferred stock or retained earnings.Short-term debt such as working capital requirements is also considered to be part of the capital structure. Some companies

Assignment: Capital Structure PART A 1. Apple Corporation has 2.5 million shares outstanding with a market value of $2.00 each (expected return = 16%) and debt with a market value of $1, 000,000 and a return of 10% Required a. What is the return on the capital of Apple Corporation? [Show all workings and formulae) [7.5 marks] 2. Samsung generates pre-tax earnings of $2,000,000 per year. Currently it has issued 1 million shares which sell for $10 each. Samsung has no debt in

FINE 3100 Problems for Midterm – Additional Capital Structure Problems Question 1 Belgarion Enterprises Asset beta, the riskiness of the firm, can be found as the weighted average of the betas of its debt and equity, where the weights are fraction of the firm financed by debt and equity: β A = D/V βD + E/V βE = .5 × 0 + .5 × 1.4 = .7 To find the beta of the firm with no debt, find βo or βu using the formula for levered equity: βE,L = βo + [βo – βD] D/E ( 1 – TC) Rearrange to find

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --- oOo --- HUỲNH ANH KIỆT CAPITAL STRUCTURE AND FIRM PERFORMANCE: CASE STUDY: LISTED COMPANIES IN HOCHIMINH STOCK EXCHANGE MASTER THESIS Ho Chi Minh City – 2010 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --- oOo --- HUỲNH ANH KIỆT CAPITAL STRUCTURE AND FIRM PERFORMANCE: CASE STUDY: LISTED COMPANIES IN HOCHIMINH STOCK EXCHANGE MAJOR: BUSINESS ADMINISTRATION MAJOR CODE: 60

Caleb Johnson Capital Structure Theory Working Capital Management Dr. Woodward 10/14/14 Capital Structure Theory Part a. (Capital Structure) Capital structure is very important. Not only does it influence the return a company earns for its shareholders but can also be a determining factor on whether or not a firm survives a recession. A company’s capital structure is a mix of their short-term debt, long-term debt, and equity. A firm’s capital structure is the way the firm finances all of its

• What long-term investments should the firm undertake (capital budgeting) and how will investment and finance decisions affect the firm 's value (valuation)? • How can cash be raised for the required investments? This is known as the ‘financing decision ' (cost of capital, capital structure and leasing). • How will the firm manage its day-to-day cash and financial affairs (short-term financing and net working capital)? The Capital Budgeting Mini Case presents a financial decision of acquiring

Corporate Tax, Cost of Debt, Cost of Equity and Capital Structure: A case study of REITs and conventional real estate firms in the UK University of Groningen Faculty of Economics and Business BSc International Business January 2013 Table of contents 1. Introduction 4 2. REITs 7 3. Literature Review 9 3.1 Capital Structure Irrelevance 9 3.2 Present Models 10 4. Data and Methodology 12 4.1 Regression 12 5. Findings and Discussion 16 6. Conclusion 20 7. Appendix

CAPITAL STRUCTURE MANAGEMENT IN NEPAL (A CASE STUDY ON NABIL, NIBL, NEA, NTC & HGICL) Table of Contents: Recommendation I Viva- Voce Sheet II Declaration III Acknowledgement IV List of Figures V List of Tables VI Abbreviation VII CHAPTER I. INTRODUCTION Pg No. 1. Background of the study 1 2

Introduction Capital Structure Capital structure is defined as the composition of a company’s debt, equity and hybrid securities which is used to finance its assets. The capital structure is the manner by which a firm funds its operations and development by utilising distinctive sources of funds. For example, a firm having 20 million pounds in equity and 80 million pounds in debt is known to be 80% debt-financed and 20% equity financed. In this example, the ratio of debt to total financing is