MICROSOFT (present day)

2. Alter Financing Mix or Take Projects

f. Given the investment opportunities that the firm has (and the returns it can earn from them), make a judgment on whether the firm will be better served by recapitalizing its business (by borrowing money and reducing equity or issuing equity and retiring debt) or investing in new projects.

g. If the firm is underlevered and decides to reduce equity, make an assessment of the stockholders of the firm and their preferences for dividends as opposed to stock buybacks.