justify your opinion on each of four statement a. b. c. d.

This task asseses the following learning outcomes: Demonstrate a deep understanding of the theory and practices of financing a firm and its capital structure Evaluate the financing risk that may result from the chosen debt ratio. Critically evaluate the dividend payout ratio. Describe and analyze the trade-off between paying dividends and retaining the profits within the company. Explain the purpose and procedure related to stock repurchases. Evaluate and advice on a firm going from private to a public company. CASE 1 (20 points) We claim that the goal of the firm is to maximize current market value. Could the following actions be consistent with that goal? Explain. a. The firm adds a cost-of-living adjustment to the pensions of its retired employees b. The firm reduces its dividend payment, choosing to reinvest more earnings in the business. The firm buys a corporate jet for its executives d. The firm drills for oil in a remote jungle. The chance of finding oil is only 1 in S. C