"Capital Structure Approach To Maximize Shareholder Return" Essays and Research Papers

  • Capital Structure Approach To Maximize Shareholder Return

    OPTIMAL CAPITAL STRUCTURE INTRODUCTION This report tries to visualize “OPTIMAL CAPITAL STRUCTURE and represent the facts that include features of capital structure, determinants of capital structure, and patterns of capital structure, types and theories of capital structure, theory of optimal capital structure, risk associated with capital structure, external assessment of capital structure and some assumption related to capital structure. BROAD OBJECTIVE • To determine features of capital...

    Basic financial concepts, Capital structure, Corporate finance 1496  Words | 6  Pages

  • Capital structure and shareholder return

    Birmingham Business School BSc Accounting and Finance Capital structure and shareholder return in Chinese banking industry Your Name Your Registration Number (07 14856) Extended Essay 2011-2012 Supervisor’s Name The length of the main body of the essay: 5,770 words Index Abstract In June 2004, Basel II was published and it required banks to set up risk and capital management requirements so as to ensure adequate capital for the risks, to which the banks are exposed through...

    Bank, Banking, Basel II 6005  Words | 29  Pages

  • Capital Structure

    including; • 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...

    Capital budgeting, Cash flow, Discounted cash flow 1969  Words | 6  Pages

  • Capital Structure Case

    Industries’ Capital Structure Case in Ch. 11 of Principles of Managerial Finance Write a 350- to 700-word memo to the president of McGraw Industries that responds to questions in the case. Explain how the cost of debt, cost of equity, and weighted average cost of capital are determined. Cost of debt is simply the weighted rates of interest paid by the company on its debts. However, cost is equity is not so straightforward. The cost of equity is based on an estimate of a reasonable rate of return on the...

    Capital structure, Cost of capital, Debt 1155  Words | 4  Pages

  • Determinants of Capital Structure

    Determinants of capital structure In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. Simply, capital structure refers to the mix of debt and equity used by a firm in financing its assets. The capital structure decision is one of the most important decisions made by financial management. The capital structure decision is at...

    Capital structure, Corporate finance, Cost of capital 2652  Words | 7  Pages

  • Capital Structure Theory Essay

    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...

    Capital structure, Corporate finance, Cost of capital 1209  Words | 4  Pages

  • Capital Structure

    out the required return for expanding Apix activities to include food packaging. To support Apix leadership, we will explain capital structure and determine weighted average cost of capital (WACC) from the assumption provided by Mary Francis. Furthermore, we will show how WACC and Capital Structure can be leveraged to find out the viability of the capital project. Additionally, we will explain marginal cost of capital. To close, we will make a recommendation on the best approach to apply to project...

    Capital structure, Corporate finance, Economics 1020  Words | 4  Pages

  • capital structure puzzle

    I s there a way of dividing a company’s capital base between debt and equity that can be expected to maximize fi rm value? And, if so, what are the critical factors in determining the target leverage ratio for a given company? Although corporate fi nance has been taught in business schools for more than a century, the academic fi nance profession has found it diffi cult to come up with defi nitive answers to these questions. Part of the diffi culty stems from how the discipline has evolved...

    Corporate tax, Finance, Income tax 1385  Words | 5  Pages

  • Capital Structure

    financial risks is the debt to total capitalization ratio. This ratio measures the portion of a company’s total capital structure that is financed by debts. The ratio is calculated as: According to the balance sheet dated May 31, 2014, Nike had a total debt of $1.373 billion, and total shareholders’ equity of $10.824 billion. Computing these numbers gives a debt to total capital ratio of 11.26%. The balance sheet of Nike shows that there is no preferred stock offered by the company but...

    Asset, Balance sheet, Corporate finance 1206  Words | 4  Pages

  • Factors determining Capital Structure

    Capital Structure: The most important function of Financial Management is to make decisions about the capital structure of firm. Capital structure refers to the make up a firm’s capitalization. It represents the mix of different sources of long term funds in the total capitalization of the company like equity shares, preference shares, retained earnings, long-term loans etc. In other words it can be precisely told as financing plan of the company. Capital is required to finance investments in plant...

    Capital structure, Cash flow, Corporate finance 1612  Words | 5  Pages

  • Managerial Actions to Maximize Shareholder Wealth

    Managerial Actions to Maximize Shareholder Wealth What types of actions can managers take to maximize shareholder wealth? To answer this question, we first need to ask, “What determines a firm’s value?” In a nutshell, it is a company’s ability to generate cash flows now and in the future. We address different aspects of this in detail throughout the book, but we can lay out three basic facts now: (1) Any financial asset, including a company’s stock, is valu- able only to the extent that it generates...

    Cash flow, Corporate finance, Finance 928  Words | 3  Pages

  • CAPITAL STRUCTURE

    Capital structure describes how a corporation has organized its capital—how it obtains the financial resources with which it operates its business. Businesses adopt various capital structures to meet both internal needs for capital and external requirements for returns on shareholders investments. As shown on its balance sheet, a company's capitalization is constructed from three basic blocks: Long-term debt. By standard accounting definition, long-term debt includes obligations that are...

    Corporate finance, Debt, Finance 1599  Words | 5  Pages

  • Ch. 16 - Financial Leverage and Capital Structure

    Chpt.16 Financial Leverage and Capital Structure Financial Leverage Chapter Outline Financial Leverage Effect of leverage Break-even Analysis Homemade Leverage M&M Propositions (I & II): optimal D/E? No tax Corporate tax Corporate tax & bankruptcy costs Corporate & personal taxes Arbitrage The Capital-Structure Question and The Pie Model The value of a firm is defined to be the sum of the value of the firm’s debt and the firm’s equity. V=E+B If the goal of the management of the firm is...

    Corporate finance, Debt, Finance 924  Words | 6  Pages

  • Shareholder Wealth

    finance managers can, in practice, contribute to the maximisation of shareholder wealth”. This essay will examine how finance managers in day to day practice can participate in the aid of increasing maximum shareholder wealth. The focus point of this is based on the financial managers themselves, how they can manipulate and change things in order to increase shareholder wealth using certain tools and methods of analysis. Shareholders are deemed as the owners of the business. Their main aim is to...

    Cash flow, Corporate finance, Discounted cash flow 2053  Words | 6  Pages

  • Shareholder and Stakeholder Approaches

    investigated under two different approaches on corporate value maximization: Shareholder Approach and Stakeholder Approach. So, firstly both approaches are defined briefly. Secondly, compare and contrast of shareholder and stakeholder approaches is made. Keywords: Purpose, Corporation, Value Maximization, Shareholder Approach, Stakeholder Approach. Shareholder Approach on Value Maximization: Shareholder approach on value maximization focuses the corporation’s purpose on maximizing...

    Business ethics, Economics, Shareholder 1466  Words | 5  Pages

  • Bed Bath and Beyond: Capital Structure Decision (HBR Case Study)

    under the old fashioned premise that “cash is king, and debt is bad”. As of late their capital structure has become a big issue amongst investors. They are concerned that the current unlevered structure is not maximizing value and are wary of the risks associated with the companies large and growing cash balances. Currently BBBY is facing the issue of trying to decide wether their current capital structure is optimal moving into the future, and if not, what decisions they need to make to achieve...

    Bed Bath & Beyond, Corporate finance, Debt 1591  Words | 7  Pages

  • capital structure

    A review of capital structure theories 1.0 Introduction One of the most contentious financial issues that have provoked intense academic research during the last decades is the theory of capital structure. Capital structure can be defined as a 'Mix of different securities issued by a firm' (Brealey and Myers, 2003). Simply speaking, capital structure mainly contains two elements, debt and equity. In 1958, through combining tax and debt factors in a simple model to price the value of a company...

    Asymmetric information, Capital accumulation, Corporate finance 1069  Words | 3  Pages

  • Capital Structure

    Capital Structure In finance, the term “capital structure” refers to the way a firm finances its assets. Generally speaking, there are two main forms of capital structure: debt financing and equity financing (Cumming 52; Myers, 83). Each type has its own advantages and disadvantages, and an essential task for the successful manager of a firm is to find an optimal capital structure in terms of risk and reward for stockholders. When making decisions that affect capital structure, managers must be...

    Capital structure, Corporate finance, Debt 2014  Words | 7  Pages

  • Intel: Stock and Capital Structure

    Describe briefly Intel’s current capital structure. Discuss whether in your view this capital structure is optimal for Intel, with particular emphasis on the pros and cons of Intel’s substantial cash holdings. Articulate and defend a “target” capital structure for Intel. Cee Capital Structure As shown in the financial income statement (Exhibit3), Intel Corp. (INTC) has a capital structure consisting most of equity. Intel has very little debt in its capital structure and the cost of debt would have...

    Capital structure, Corporate finance, Cost of capital 714  Words | 3  Pages

  • Cost of Capital

    Cost of Capital Definition: cost of capital is the rate of return that a company must earn on its project investments to maintain its market value and attract funds. The cost of capital to a company is the minimum rate of return that is must earn on its investments in order to satisfy the various categories of investors, who have made investments in the form of shares , debentures and loans. The cost of capital in operational terms refers to the discount rate that would be used in determining the...

    Corporate finance, Costs, Finance 1468  Words | 5  Pages

  • Financial Managers Need Only Concentrate on Meeting the Needs of Shareholders - No Other Group Matters

    concentrate on meeting the needs of shareholders - no other group matters” Discuss the above statement using practical examples to support you answer. Contents Page Introduction 1-2 Formulas: Profitability 2-3 Liquidity 4-5 Investment 5-6 Summary of Widgets Finical Ratios: Profitability 6-8 Liquidity 8-9 Investment 9-10 Conclusion 10 Bibliography 11 Appendix 1 12 A shareholder is someone that legally owns...

    Board of directors, Cash flow, Corporate finance 1862  Words | 7  Pages

  • Business Financing and the Capital Structure

    Assignment 2: Business Financing and the Capital Structure Principles of Finance Finance 100 December 12, 2013 Business Financing and the Capital Structure Raising Business Capital As a financial advisor to this business there are two options to consider for raising business capital, equity financing and debt financing. The details, advantages, and disadvantages of both options will be provided. Also information about raising capital by selecting an investment banker...

    Bond, Corporate finance, Debt 1466  Words | 5  Pages

  • Return on Investment

     ROI Project: Phase #1 Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company Like it or not, with the current state of the economy, as well as, enforced implications of the Affordable Care Act, a large number of hospitals and healthcare agencies will close their doors for good...

    Capital budgeting, Cash flow, Corporate finance 1457  Words | 6  Pages

  • Diageo Capital Structure

    1. What do you think about the capital structure policies Diageo has pursued in the past. Do they make sense? How does it compare to Diageo’s competitors’ policies? Which competitors would make for the best comparison? (40%) Diageo was formed from the merger of Grand Metropolitan plc and Guinness plc. Before the merge, both companies used little debt (based on the book D/E ratio and net debt to total capital in the table below) to finance themselves which helped them gain and maintain high credit...

    Alcoholic beverage, Corporate finance, Credit rating 1126  Words | 3  Pages

  • Capital Structure within Ford

    Company Ford Motor Company Capital Structure Business and Financial Risks The Modigliani and Miller Theory of Capital Structure and Criticisms Optimal Capital Structure at Ford References Abstract The purpose of this paper is to analyze Ford Motor Company’s capital structure to understand the financial risks and companies financial make up. The research paper will also discuss the Modigliani and Miller capital structure theory including common criticisms...

    Corporate finance, Dearborn, Michigan, Economics 1308  Words | 6  Pages

  • Capital structure for Diageo

    of Diageo, the treasury team was given the task of establishing the cost of capital for each of the different areas the company operated. The team had to create a simulation model which should consider new finance approaches, treasury functions to focus on, what the firm's risk footprints will be, how to calculate cost of capital and finally how to optimally structure capital. How has Diageo managed its capital structure? Both Grand Metropolitan and Guinness had little debt prior to the merger,...

    Balance sheet, Basic financial concepts, Corporate finance 1971  Words | 6  Pages

  • Analysis on Capital Structure, Dividend Policy & Working Capital Requirements of

    The policies pertaining to Capital Structure & Dividend policy play a major role in the successful and efficient working of the bank. The objectives of the bank are the criteria for a bank to frame its policies. And it is very much clear that the objectives and the policies at SBI go hand-in-hand. Analysis of Capital Structure SBI has Debt to the tune of Rs. 4752.24 billion [Deposits + Borrowings], and Equity to the tune of Rs. 312.98 billion [Equity share capital + Reserves & Surplus] In...

    Bank, Banks of India, Dividend 1401  Words | 4  Pages

  • Capital Structure

     Capital Structure 7 July 2013 Introduction The capital structure for a company can be very important for the success of the company. Many aspects of the business must be evaluated in order to determine the appropriate capital structure. Throughout this paper, three companies will be evaluated. The three companies being evaluated are eBay (NasdaqGS: EBAY), The Clorox Company (NYSE: CLX), and Alaska Air Group Inc. (NYSE: ALK). Company Overview eBay is a very popular...

    Alaska Air Group, Alaska Airlines, Clorox 1273  Words | 5  Pages

  • Capital Structure

    CAPITAL STRUCTURE: MEANING: - Capital structure of a firm is a reflection of the overall investment and financing strategy of the firm. - Capital structure can be of various kinds as described below: ▪ Horizontal capital structure: the firm has zero debt component in the structure mix. Expansion of the firm takes through equity or retained earnings only. ▪ Vertical capital structure: the base of the structure is formed by a small amount...

    Balance sheet, Capital structure, Corporate finance 554  Words | 3  Pages

  • Business Financing and the Capital Structure

    Business Financing and the Capital Structure Explain the process of financial planning used to estimate asset investment requirements for a corporation. Explain the concept of working capital management. Identify and briefly describe several financial instruments that are used as marketable securities to park excess cash. As a business owner, it is important to know the value of your assets as they can be used as leverage for obtaining loans and can be used to estimate your ability to repay your...

    Bond, Debt, Finance 1987  Words | 6  Pages

  • Internal Rate of Return and Tangshan Mining

    -$2,000,000 | 1 | 500,000 | | 2 | 500,000 | | 3 | 500,000 | | 4 | 500,000 | | 5 | 500,000 | | 6 | 500,000 | | 7 | 500,000 | 5,650,000 | a. Compute the NPV and IRR for the above two projects, assuming a 13% required rate of return. b. Discuss the ranking conflict. c. What decision should be made regarding these two projects? Answer: a. NPV of A = $211,305 NPV of B = $401,592.64 IRR of A = 16.33% IRR of B = 15.99% b. The later cash flow of B causes...

    Cash flow, Corporate finance, Discounted cash flow 837  Words | 4  Pages

  • Capital Structure

    Assignment 1. Some of the key trends in the capital structure of India Inc. are as follows: Key observations: * Indian corporate employ substantial amount of debt in their capital structure in terms of the debt-equity ratio as well as total debt to total assets ratio. * As a result of debt-dominated capital structure, the Indian corporate are exposed to a very high degree of total risk as reflected in high degree of operating leverage and financial leverage and, consequently, are...

    Asset, Balance sheet, Capital structure 1456  Words | 5  Pages

  • Managing Capital And Financial Assets

    Managing Capital and Financial Assets   As Competition Bikes considers expansion into Canada, it must decide if the initial investment is worth the potential return. This report will recommend the capital structure that will maximize shareholder return, analyze the capital budget and areas of concern, recommend how to obtain and manage working capital for the expansion, and evaluate the options of merging with vs. acquiring Canadian Biking. A1. Capital Structure Capital structure refers to...

    Capital budgeting, Cash flow, Corporate finance 1298  Words | 5  Pages

  • Capital One's Organizational Structure

    “At capital One, diversity means seeking out and embracing differences for the richness those differences add to our lives and to our business.” (http://www.capitalone.com/about/corporatecitizenship/diversity.php) A company that opens it business to diversity has the ability to value human differences, and in return acquire beneficial relationships. Capital One has partnered with MWBE (Minority and Women Business Enterprises) and the relationship is yielding a positive reaction in terms of the...

    Corporate governance, Flat organization, Hierarchy 2486  Words | 7  Pages

  • Theories of Capital Structure

    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...

    Academic dishonesty, Arithmetic mean, Finance 1066  Words | 4  Pages

  • Return on Invested Capital Notes

    Ch 4: Return on Invested Capital 1. Drivers of Return on Invested Capital ROIC = (1-Tax Rate)*((Price per Unit-Cost per Unit)/Invested Capital per Unit) A company with a competitive advantage will have a higher ROIC because it either can charge a premium price or can produce at a more efficient cost. The structure-conduct-performance (SCP) framework is the strategy model that underlies our thinking about what drives competitive advantage and ROIC. The structure of an industry influences...

    Capitalism, Company, Competition 667  Words | 3  Pages

  • Intel Capital Structure

    Put-Warrant/Convertible Bond proposal. Does it solve Intel’s capital structure dilemma? What arguments might be made in favor of it? Intel’s capital structure dilemma was that it was holding too much cash on hand. Eventually, there were three available strategies or alternatives that Intel could undertake in terms of cash disbursement policies. First, it could continue or expand its market-repurchase program. Secondly, Intel could declare dividends to its shareholders on existing stocks. The last strategy is to...

    Bond, Corporate finance, Debt 879  Words | 4  Pages

  • Assignment No.4 Capital structure analysis

     Assignment No .4 Capital Structure Analysis Introduction: Over the short term, there can be many substantial price shifts in a particular stock, but the vast majority of these price shifts are due to the changes in potential future earnings. The same can be said about the long-term valuations of a stock: earnings will be the main driver of the stock's price. After all, investors will not invest in a company that is not making, nor...

    Corporate finance, Economics, Finance 828  Words | 6  Pages

  • Capital Structure

    tructure CORPORATE FINANCE PROJECTPRACTICAL CONSIDERATIONS OF CAPITAL STRUCTURE OF A COMPANY IN INDIASubmitted to: Submitted by:Mr. Rajesh Jhamb Atul Pabbi 09104013Priyanka Bhola 09104043Rahul Mahajan 09104045Shreya Adya 09104052ACKNOWLEDGEMENTAn acknowledgement is not just a mere formality but a true opportunity to express my sincere gratitude towards all the people who have been of great help and have played an important role in making the training a great learning experience providing...

    Capital structure, Corporate finance, Debt 12228  Words | 41  Pages

  • Capital Structure

    . . ) Capital Structure theories. Chapter 2 CMA. Dipak Joshi Capital Structure Theories Q1. What is capital, define the types of capital? Ans: Financial planning and decision play a major role in the field of financial management which consists of the major area of financial management such as, capitalization, financial structure, capital structure, leverage and financial forecasting. Financial planning includes the following important parts: ● Estimating the amount of capital to be raised...

    Balance sheet, Capital structure, Corporate finance 5576  Words | 19  Pages

  • Siemens Capital Structure Analysis

    Siemens AG Financial Analysis Capital Structure and current financial situation 12/5/2012 Andon Pavlov, 296181 Company Review Siemens AG is a German multinational engineering and electronics conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company. Siemens' principal activities are in the fields of industry, energy, transportation and healthcare. It is organized into five main divisions: Industry, Energy, Healthcare...

    Asset, Balance sheet, Fujitsu Siemens Computers 2047  Words | 6  Pages

  • Determinants of Capital Structure in Pakistan”

    “DETERMINANTS OF CAPITAL STRUCTURE IN PAKISTAN” Capital structure refers to the combination of asset financing from different available sources. Normally the companies have two choices, either to finance the assets from internal source that is termed as retained earnings or from external source that splits into debt and equity. A firm’s capital structure is than the composition of its liabilities. In reality, capital structure of firms may be highly complex and consist of number of sources. These...

    Capital structure, Corporate finance, Debt 1575  Words | 5  Pages

  • Capital Structure

    Capital Structure Decision A Summary Prepared By:Harsh Mehta: 40344 Hiral Dodia: 60226 Mihir Gada: 61183 Pratik Ganatra: 64510 Sweta Shah: 60641 Course: Financial Management 2 Instructor: Prof. J Mamtora Chapter 20: Capital Structure Decision Introduction This chapter discusses different kinds of analyses helpful in choosing the capital structure, explores certain guidelines relevant for capital structure decision, and examines capital structure policies in practices. A variety of analyses...

    Capital structure, Corporate finance, Debt 2623  Words | 10  Pages

  • Capital Structure and Agency Theory

    decisions, the optimization of capital structure has a great influence on the performance of the companies, for a reasonable capital structure can decrease the financing cost, take advantage of the financial leverage and play an important role in corporation governance. Given the importance of capital structure, this essay will firstly discuss the ways that capital structure affects corporation value, then it will introduce the influencing factors of capital structure and how to effectively manage...

    Adverse selection, Cost of capital, Economics 2798  Words | 9  Pages

  • Columbia Capital Structure

    Capital Structure Policy In the normal course of business, Columbia Sportswear’s financial position and results operations are subject to a variety of market risks. Those market risks include interest movements on borrowing and investment activities. As well as the volatility of currency exchange rate movement. The business is also affected by the general seasonal trends due to the nature of outdoor industry. In 2011, approximately 65% of the net sale and all of their profitability were realized...

    Asset, Capital, Capital expenditure 769  Words | 3  Pages

  • capital structure

    Financial Management Unit – 4 Capital Structure Capital Structure • It refers to the kinds of securities and the proportionate amounts that make up capitalization. • A decision about the proportion among the three types of securities viz., Equity shares, Pref. Shares and Debentures refers to the Capital Structure of an enterprise. What is “Capital Structure”? • Definition The capital structure of a firm is the mix of different securities issued by the firm to finance its operations...

    Capital structure, Corporate finance, Cost of capital 797  Words | 20  Pages

  • Working Capital Management

    Efficient working capital management is an integral component of the overall corporate strategy to create shareholder value. Working capital is the result of the time lag between the expenditure for the purchase of raw materials and the collection for the sale of the finished product. The continuing flow of cash from suppliers to inventory to accounts receivable and back into cash is usually referred to as the cash conversion cycle. The way in which working capital is managed can have a significant...

    Balance sheet, Cash conversion cycle, Cash flow 1379  Words | 5  Pages

  • Capital Structure theories

    Capital Structure Theories Capital Structure Capital Structure is the proportion of debt, preference and equity capitals in the total financing of the firm’s assets. The main objective of financial management is to maximize the value of the equity shares of the firm. Given this objective, the firm has to choose that financing mix/capital structure that results in maximizing the wealth of the equity shareholders. Such a capital structure is called as the optimum capital structure. At the optimum...

    Basic financial concepts, Capital structure, Earnings before interest and taxes 2148  Words | 9  Pages

  • Capital Structure

    The Capital Structure of Chinese Companies 1. Introduction Capital structure is considered as a way to determine how a corporation financing its assets by issuing debt or equity. If the firm is entirely financed by the common equity, then it is so called an unlevered firmed, and its whole cash flow belong to its stockholders. If the firm financed both debt and equity, then it is so called a levered firm, and its cash flow will first goes to debt holders and then to stockholders. According to Brealey...

    Capital structure, Corporate finance, Corporate tax 3633  Words | 10  Pages

  • capital structure

    Capital Structure Financial Seminar DFI 605 Group Members Nidhi Batta D61/79041/2012 Caleb Musau Kivuva D61/79601/2012 Tom Mbuya Odundo D61/78251/2012 CathrineWanjiku Kamau D61/60682/2013 Daniel Mwangi Mwaniki D61/84153/2012 Ndiangui James Wambugu D61/79627/2012 Submitted to: Mr. Mirie Mwangi September - December 2013 Submitted in partial fulfilment of the requirements of the Masters in Business Administration degree at the University of Nairobi. ...

    Capital structure, Corporate finance, Finance 8165  Words | 30  Pages

  • Net Present Value and Capital Budgeting Process

    Introduction Investment>>Capital Budgeting: The management of long-term (fixed) assets. Ensures investment projects create (vs destroy) value. Finance>>Working capital management: The management of short-term assets and liabilities. Ensures cash inflows = cash outflows at all times. Finance>>Capital Structure: The management of long-term financing. Balances debt & equity to maximize value. Payout>>Dividends and Share Repurchases: The management of discretionary...

    Internal rate of return, Net present value 758  Words | 3  Pages

  • Weighted Average Cost of Capital and Marriott

    Q1: The first financial strategy “Manage rather than own hotel assets” is consistent with growth objectives. The company sold out the hotel assets while keeping a long-term management contract. We calculated the Return on Assets (ROA) from 1978 to 1987, it increased a little in 1979 and kept decreasing to 1987(Exhibit 1). By managing rather than owning the hotel assets, Marriott is able to increase its ROA thereby increasing potential profitability and its financial position in the market. Marriott...

    Arithmetic mean, Cost of capital, Economics 1963  Words | 6  Pages

  • Capital Structure

    Problem The capital structure of a firm put simply is the ratio of debt to equity capital used by the firm in financing its assets and operations, also known as leverage or gearing. It is the approach that a firm takes in financing itself through a composition of equity, bonds, and loans. In financing its operations, a firm will tend to use a combination of debt and equity that best maximises the value of the firm. There has been considerable debate over the relevance of capital structure and its...

    Capital structure, Corporate finance, Cost of capital 4922  Words | 13  Pages

  • California Pizza Kitchen Case Study on Capital Structure/Leveraging Debt

    A company's capital structure is a very important component of a company's financial health and longevity. The capital structure should maximize total net profit and overall shareholder wealth. An optimal proportion of equity and debt as a company's capital structure is an indication of a well-managed and successful company and should be a goal for most corporations. Beverly Flax and Rick Rosenfield founded California Pizza Kitchen (CPK) in 1985 in Beverly Hills, California. It is a casual dining...

    Capital structure, Cost of capital, Finance 1951  Words | 6  Pages

  • Capital Structure Theories

    you would read the topic theories of capital structure. Here, I have made these theories simplified. I hope, you can study these theories here and use these theories as reference. We all know that capital structure is combination of sources of funds in which we can include two main sources' proportion. One is share capital and other is Debt. All four theories are just explaining the effect of changing the proportion of these sources on the overall cost of capital and total value of firm. If I have...

    Capital structure, Cost of capital, Earnings before interest and taxes 2862  Words | 10  Pages

  • Do You Think Shareholder Activism Works

    IN YOUR OPINION DYOU THINK SHAREHOLDER ACTIVISM WORKS, WHY OR WHY NOT Shareholder Activism refers to a range of actions taken by a shareholder to influence corporate management and board. Actions range from threatening the sale of shares (“exit”), letter writing, meetings management, to asking questions at shareholders meetings and the use of corporate voting rights. The common definition of a shareholder activist is a shareholder “who tries to change the status quo through the “voice”, without...

    Corporate governance, Hedge fund, Institutional investor 1896  Words | 6  Pages

  • Cost of Capital Using Discounted Cash Flow Approach

    dividend-yield-plus-growth-rate approach, include: the current stock price, the current dividend, and the marginal investor’s expected dividend growth rate. The stock price and the dividend are east to obtain, but the expected growth rate is difficult to estimate (Ehrhardt & Brigham, 2011). The advantages and disadvantages of using DCF approach will be explained along with the further clarification on the cost of capital using DCF approach. The cost of capital is a term used in the field of financial...

    Cash flow, Discounted cash flow, Internal rate of return 1052  Words | 3  Pages

  • relationship between factors of capital structure

    INTRODUCTION 1.0 CHAPTER OVERVIEW Capital plays an important role in business. Every business enterprise, whether big, medium or small, manufacturing, services or industrial, needs capital to carry on its operations smoothly and to achieve its targets organization’s objective. Capital Structure means how an organization or company manage their capital or obtain financial resources to manage their business well. Business adopts different types of capital structures in order to meet the internal needs...

    Capital structure, Corporate finance, Economics 1811  Words | 7  Pages

  • Shareholder Risk

    One of the most widely used concepts in finance is that shareholders require a risk premium over bond yields to bear the additional risks of equity investments. While models such as the two-parameter capital asset pricing model (CAPM) or arbitrage pricing theory offer explicit methods for varying risk premia across securities, the models are invariably linked to some underlying market (or factor-specific) risk premium. Unfortunately, the theortical models provide limited practical advice on establishing...

    Capital asset pricing model, Economics, Financial markets 823  Words | 3  Pages

  • Capital Structure

    THE IMPLICATIONS OF CAPITAL STRUCTURE THEORY AND REGULATION FOR SOUTH AFRICAN BANKING INSTITUTIONS By WESLEY NAIDU Submitted in partial fulfillment of the requirements for the degree MAGISTER COMMERCII in FINANCIAL MANAGEMENT SCIENCES In the FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES At the UNIVERSITY OF PRETORIA SUPERVISOR: Prof. JOHANNES HvH DE WET November 2011 -i- ABSTRACT The topic of capital structure has been one that has plagued the academic world for a number of years...

    Basel II, Capital structure, Corporate finance 29457  Words | 105  Pages

tracking img