Please help me complete and submit a 3,500 to 4,200-word Capital Structure Analysis Report. For this report, use Target. This report will consist of three sections:
Part A) Working Capital Management Section
1) Identify which of the liquidity or efficiency ratios were under-performing relative to industry standard or were deteriorating over the five-year trend.
2) Recommend specific changes in working capital strategies for each of the following (when applicable):
a) Cash and marketable securities
b) Credit policy
d) Sources and uses of short-term financing
3) Your recommendations should include a detailed plan of your working capital strategy. Provide quantitative support for your recommendations. Discuss consequences of your recommendations on the firm's sales, profitability, customer service, quality, risks, and so forth.
Part B: Valuation and Investment Section
1) Prepare a five-year trend analysis table for the following financial market ratios for the company:
a) Price earnings ratio
b) Earnings per share
c) Dividend yield
d) Common stock share price
2) Recommend a "buy," "hold," or "sell" (reflecting expected performance over the next 12 months) for the company, based upon your prior financial research.
3) Provide five supporting reasons for this recommendation (including financial, market, and industry risks).
Part C: Cost of Capital Section
1) Calculate the cost of capital (show calculations) for the company using the following:
a) Weighted average cost of capital; and
b)Capital-asset pricing model (beta).
2) Discuss the relative strengths and weaknesses of the methods above as to the appropriate discount rate for the firm.
3) Describe why these two methodologies may produce different results.
4) How would you recommend that the firm lower its cost of capital?
Part D: Cost of Capital Section
Assume that the company will engage in a major capital acquisition program that is expected to improve EBIT by 10 percent. Do the following:
1) Calculate the EBIT/EPS for debt financing. Discuss the financial implications. Document the source of your information.
2) Calculate the EBIT/EPS for equity financing. Discuss the financial implications. Document the source of your information.
Based upon the calculations above, recommend the best capital structure. Document the source of your information.