Discussion Post: Capital Budgeting
Capital budgeting is a vital part of a firm's decision-making. Each approach will provide a piece of information to help analyze potential projects to make informed decisions.
a) From a financial manager's perspective, discuss the capital-budgeting process used to identify projects that add to the firm's value.
b) How do capital-budgeting decisions help to define a firm's strategic direction?
Part I: Capital Structure Decisions
Examining the effects of a company's financial leverage on stock prices, earnings per share, and the cost of capital is important to a firm's capital structure.
i. What issues managers should consider when making capital structure decisions?
ii. Why would companies have different capital structures? Explain.
Part II: The Firm's and Your Personal Capital Structure
Take control of your money! This concept is extremely important because it can influence a company's return and your capital structure.
i. How does a firm's capital structure relate to your personal capital structure?
ii. In what ways are they similar?
iii. Provide examples of how you use debt and equity in your personal financial life that parallels the basic capital structure decisions made by a firm.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.