MICROSOFT (present day)

3. Financing Type

h. Given the typical investments that your firm makes and the make up of its assets, evaluate the type of financing that offers the best combination of low cost and high flexibility.

i. If possible, examine how your companys value and operating income have evolved over time, as a function of key macro variables (interest rates, inflation, real growth and exchange rates).

j. If your company does not have a long history or there is too much noise in the data, try to assess, based on the sector, how sensitive your firms value and earnings are to macro economic variables.

k. Compare the actual financing used by the firm to the optimal financing and examine reasons for the differences. If you can find a way to bridge these differences, given market constraints, do so.