Mechanics of Moving to the Optimal:
-If your firm’s actual debt ratio is different from its recommended debt ratio, how should they get from the actual to the optimal? In particular,
*Should they do it gradually over time or should they do it right now?
*Should they alter their existing mix (by buying back stock or retiring debt) or should they take new projects with debt or equity?
*What type of financing should this firm use? In particular,
-Should it be short term or long term?
-What currency should it be in?
-What special features should the financing have?
Dividend Policy:
– How has this company returned cash to its owners? Has it paid dividends, bought back stock or spun off assets?
– Given this firm’s characteristics today, how would you recommend that they return cash to stockholders (assuming that they have excess cash)?