Instructions
You will demonstrate your competency in the term paper by evaluating whether you believe a public company of your choice has a capital structure and financing strategy that is appropriate for its business model. This is an opportunity for you to demonstrate your competence in how well you have learned about a specific company and its underlying business drivers while demonstrating your proficiency in applying the concepts covered in this course.
1. Explain the financial objectives of an organization and apply quantitative, qualitative and problem-solving skills to achieve those objectives. The paper’s executive summary should begin with the conclusion (i.e., your findings). Is it adequately financed? Why or why not? [If publicly traded, then you must include published industry norms regarding capital structure and financing mix between debt versus equity.] The rest of the paper should fully explain the reasons for your evaluation.
2. Describe ethical, legal, and global issues that impact an organization’s financial position. Is the firm in a high risk, low risk or medium risk situation when examining internal and external factors? For example, a company that focuses on growth and reinvests all its profits into the core business typifies a growing, risk-taking enterprise. An example of a conservative operation is a company that generates surplus cash [pays a dividend if publicly traded] and is noted for stable, steady growth
3. Discuss the theoretical and practical aspects of corporate finance. Engage in a financial investigation related to the firm. You will need to find any research about the industry your company is in from analyst recommendations found in ValueLine, Dun & Bradstreet, Morningstar, etc. If you are studying a private business entity, then analyst reports on publicly traded comparable firms may provide an applicable standard of comparison by which you are able to arrive at your appraisal of the capital structure and financing for the business model you are studying.
4. Explain the structure and operation of financial markets domestically and internationally. Evaluate the company from a macro-economic or big-picture perspective, both domestically and internationally, in which you look at broad-based economic and industry trends.
5. Demonstrate written communication skills needed by financial managers. Conclusion, rationale, calculations, and support documentation should be included in the paper and the appendix, but relevant statistical support (i.e., bottom line figures such as rates of return, valuation, and so forth) should also be included in the body of the text.
6. Examine the financial position of an organization and make financial decisions. The critical component of this paper is financial analysis, including ratio analysis and risk analysis in relation to its capital structure. In addition, determine how the company will capitalize on these trends from operating and individual business prospects considering its financial outlook (with less importance accorded to macro-trends)? For example, determine if there is a future for the company’s core business. If the company is in the midst of either a corporate or financial restructuring, or launching a new product, what are the strategic objectives for such measures?
Requirements
The text portion of the paper needs to be between 8 to 10 pages in length; it must be typed and double-spaced. Statistical tables, graphs and charts can either be incorporated into the body of the text or referenced in your text and placed in an Appendix. Please include a bibliography of the references used in your paper.
In sum, your term paper is your “signature” project that fully reflects your grasp of the theoretical and practical aspects of capital structure & financing.
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