Analyzing the capital structure of a Company

Using your allocated company’s information, write a 2,000-word report analyzing the capital structure of your Company. Your report must be original and should synthesize the following information:

  • Evaluation of the capital structure. (10 marks)
  • An up to date WACC calculation (you need to show clearly how you have calculated the cost of debt and equity and present any assumptions and averages you have used). (20 marks)
  • Discussion of the dividend policy undertaken. (10 marks)
  • Comparison of your findings to another company within the same industry. (15 marks)
  • A critical discussion of academic theories your company follows for both Capital Structure and Dividend Policy. Reasons why you think your company follows those theories (you need to show evidence of using relevant academic literature and references). (30 marks)
  • Suggestions for any future improvements to the capital structure of your company. (15 marks)

On successful completion of this assessment, the
students will be able to:
• Identify the various sources and options of finance available to a business and discuss the factors associated with each of them.
• Debate all aspects relating to capital structure and to facilitate developing an appropriate policy for the company.
• Explain all dimensions of working capital as a significant investment for many businesses.

Sample Solution