Clearly “describe” and “explain” as required in the question. Apply the MM theory and explain carefully calculations you make. Discuss how the company’s capital structure affects the company share price movements. Compare and analyse the company’s debt ratio with industry or other competitors.

Capital structure

Structure of Assignment (1)
• Introduction
• Literature review

• Q1
— Company’s background.
— Clearly “describe” and “explain” as required in the question.
— A graph of showing changes in the firm’s capital structure (over last 5 years) may be useful.

• Q2
— Apply the MM theory and explain carefully calculations you make.
— Discuss how the company’s capital structure affects the company share price movements.
— Compare and analyse the company’s debt ratio with industry or other competitors.

• Q3
— Discuss possible changes that could be made in the firm’s capital structure.
— Focus on possible costs and risks such as agency costs, risk of bankruptcy, risk of incorrect signal etc. in the context of trade off theory and Pecking order theory
— It would be better to put your discussions in a wide context such as industry or other competitors