Assess the impact of a firms financing decisions on its capital structure and shareholder distribution policy.

Select a publicly held company and analyze its capital-structure, applying the theories and principles learned in this module. 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 firm's 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.

Compose your 57 page (excluding the title page) research paper in a MS Word document using 6th edition APA format and citation style and save it as Username-GB550.doc (Example: TAllen- GB550.doc). Please submit this Assignment through the Dropbox.

The Module 4 Competency Assessment has 7 parts. Please review the checklist criteria for additional details related to the Bold versus Mastery items.

Module Competency Assessment criteria:

• Competency Assessment: Part 1: Analyze a companys capital-structure, applying the theories and principles learned in this module.
• Competency Assessment: Part 2: Described Capital-structure evidence and implications
• Competency Assessment: Part 3: Described the criticisms of the MM model and assumptions
• Competency Assessment: Part 4: Work demonstrates a strong to exemplary comprehension of the Modigliani and Millers [MM] capital-structure theory
• Competency Assessment: Part 5: Student adequately addressed the following: Described the business and financial risks related to capital-structure
• Competency Assessment: Part 6: Analyzed several factors influencing a firm's capital structure such as business risk, tax position, the need for financial flexibility, managerial conservativeness, and growth opportunities.
• Competency Assessment: Part 7: Presented an executive summary of the student's analysis in the full of 57 pages of text, excluding the title page, table of contents, graphs, charts, tables, etc.