Assignments
Capital Structure Presentation OR Paper?Instructions:?Resource:
Company's 10K reports.
Prepare a PowerPoint® presentation OR report using the financial statements and the Management Discussion Statement, analyze the amount and character of the firm's debt and equity.
- What is their debt to equity ratio? How has it changed over the past three years?
- How many tranches of debt does the firm have? What is their cost of debt for each tranche? Calculate the cost of debt (pre-tax and post- tax).
- What does the firm indicate about their equity? Are they paying dividends to shareholders? Why or why not?
- If you were a shareholder in this firm, what equity return would you expect? Why? Important note: the shareholders' required return on equity is not the same as the ratio you may have calculated during Week 1 on the Return on Equity. You will need to calculate this using the dividend model, the Capital Asset Pricing Model, or locating it in the investment management reports in the UOP Library.
- Using your calculated cost of debt and your expected cost of equity, calculate the firm's Weighted Average Cost of Capital.
- Provide an analysis of what this means for the entity's long-term capital plans.
- Provide your recommendations for future years. What adjustments would you make in their capital structure? Why?
- Use the "Notes" feature in PowerPoint to provide the commentary that you would use in your presentation. Be sure that your analysis is rigorous and presents your team's view of how the company is doing financially.
Format your presentation OR paper consistent with APA guidelines. Be sure to include an introduction that tells the audience where you are going and a conclusion that summarizes your findings