Trident University International Module 4 Capital Structure Report

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Business Finance

Trident University International

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Module 4 - SLP

LEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICY

Review the 1) dividends for the past three years and 2) capital structure of the company you have been researching for your SLP assignment. Then answer the following questions in a Word document (except for the Excel portion specifically noted). The paper should be 2 pages in length.

  1. What has occurred with your selected company’s dividend payout, dividend yield, and dividend per share over the past three years? Do you have any explanations for what has occurred? Also, has this company had any stock splits or stock repurchases in recent years?
  2. How does your selected company’s dividend payout, dividend yield, and dividend per share compare with other companies in its industry? Has the company’s dividend strategy been similar to other companies in its industry?
  3. Use Excel to plot your selected company’s earnings and dividends over the past three years. Do you notice any patterns? What dividend policies from the background readings best match these patterns?

SLP Assignment Expectations

  • Answer the assignment questions directly.
  • Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
  • For computational problems, make sure to show your work and explain your steps.
  • For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.

Module 4 - Background

LEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICY

Required Reading

Please read through the following book chapters. Pay special attention to the concepts of operating leverage, financial leverage, business vs. financial risks, and the major theories of capital structure choices.

Vernimmen, P., Quiry, P., Dallocchio, M., Le, F. Y., & Salvi, A. (2017). Chapter 32: Capital structure and the theory of perfect capital markets in Corporate finance: Theory and practice. John Wiley & Sons, Incorporated.ISBN:978-1-119-45180-8. Available in the Trident University Library.

Vernimmen, P., Quiry, P., Dallocchio, M., Le, F. Y., & Salvi, A. (2017). Chapter 33: Capital structure, taxes and organisation theoriesin Corporate finance: Theory and practice. John Wiley & Sons, Incorporated.ISBN:978-1-119-45180-8. Available in the Trident University Library.

Finally, take a look at the following book chapter on dividend policy. Take a close look at the concepts of regular dividend policy and low-regular-and-extra dividend policy, as well as stock splits and stock repurchases:

Clive, M. (2012). Chapter 15: Dividend policy. Financial management for non-financial managers. Kogan Page. Available in the Trident Online Library.

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Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.

Running Head: CAPITAL STRUCTURE ASSIGNMENT

Capital Structure Assignment
Institutions Affiliation
Student’s Name
Course Number: Couse Name
Professor’s Name
Date

1

CAPITAL STRUCTURE

2
Introduction

On December 12, 1980, Apple Inc went public and hit a record market value of
$623.5 billion in 2012. Capital structure is bringing together all the long-term sources of
finance such as preference share capital, loan, and debentures. Capital structure tends to
explain how the listed organizations use various forms of securities to finance investments. (
Ahmeti & Prenaj,2015). Leverage uses borrowed funds to enhance returns from an
investment (Singapurwoko et al.,2011). In this context, we will be dealing with Apple Incs's
leverage, capital structure, and dividend policy for the past three years and compare it with an
industry of its kind.
First Question: Dividends
A dividend policy is a policy a company uses to structure its total amount of
dividends paid out to shareholders to its net income. Dividend payout is the earnings
percentage paid to shareholders in dividends. Dividend yield in rate is when a company pays
its shareholders for having its stock divided by the current stock price. Dividend per share is
obtained by calculating the total dividends paid out by a business such as ...


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