Select a publicly held company and analyze its capital-structure, applying the theories and principles found in Chapter 15 of the text. The structure of your research paper should include: ? A preview of capital structure issues ? Business and financial risks related to capital-structure ? Modigliani and Millers [MM] capital-structure theory ? Criticisms of the MM model and assumptions ? Capital-structure evidence and implications ? Estimating the firms optimal capital-structure A firms optimal capital-structure is that mix of debt and equity that maximizes the stock price. At any point in time, management has a specific target capital structure in mind, presumably the optimal one, though this target may change over time. For example, financial management may choose a 50% equity financing [stock] and 50% debt [bond] financing. Several factors influence a firms capital structure, including: ? Business risk ? Tax position ? The need for financial flexibility ? Managerial conservativeness ? Growth opportunities Business risk is the riskiness inherent in the firms operations if it uses no debt. This report is intended to be a capital-structure analysis of your selected public company. Your paper is intended to be an executive summary of your analysis, and is limited to a minimum of 57 pages of text, excluding the title page, table of contents, graphs, charts, tables, etc. Directions for Submitting the Final Project Compose your research paper in a MS Word® document using 6th edition APA format and citation style and save it as Username-GB550 Assignment 1-Unit#.doc (Example: TAllen- GB550 Assignment_1- Unit 5.doc). Submit your file by selecting the Unit 5: Assignment Dropbox. Please look at the attachments
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