A. Explain what is meant by the capital structure of an industrial firm (such as a manufacturing company). Be precise.
B. List components of the capital structure that you have defined above.
C. Are the items you have listed in part B above long term in nature (more than one year?)
D. Explain (in as much detail that you wish, including numerical analysis and graphs) the net income view or the traditional approach in regards to the relationship between the WACC and the value of the firm.
E. Explain (in 5 lines) why you would agree with the net income approach as listed in part D above.
F. Explain (in as much detail that you wish including numerical analysis and graphs) the operating income view or the neo-classical approach in regards to the relationship between the WACC and the value of the firm.
G. Explain (in 5 lines) why you would agree with the operating income or the neo-classical approach as listed in part D above.