Capital Structure Analysis

• To understand the limitations of the various divided theories. • To compare the various theories of dividend. The dividend Decision is one of the most important elements of financial management decision. Dividend Decision will help the company in the capital markets and establish a good corporate image for the company’s long-term development

The purpose of this paper is to explain the importance of net present value along with other investment criteria used in determining the value of business decisions regarding today’s investments for future returns. The paper will define what is meant by net present value and show how managers can use it as an analysis tool to decide if an investment is worth the calculated risk. Also, there will be three methods discussed that managers can use to propose the best financial projects to invest in to increase revenue for its owners. The methods discussed will include: the net present rule, the payback rule, and the internal rate of return. With each method there will be an explanation of their advantages and disadvantages for managers to consider in their analysis.

Financial management plays a pivotal role in increasing shareholder value and customer satisfaction. The qualitative study involves survey as the research design and financial managers as the participants. The research aims at collecting data to establish the effects of financial management on customer satisfaction and shareholder value. Customer satisfaction and shareholder value are some of the main indicators used to measure the prosperity of a business. The two aspects can be enhanced through the implementation of an effective financial management (Luo, Wieseke, & Homburg, 2012).

d.). Financial corporate needs analyses patrons in the business them follow principles which lead a company to handle finances in the right way to develop a great business. The principles are involving in investment, financing, dividend (Damodarian, n. d.). Investing principles are about showing a returning stronger than the risk in investment projects. The financing principle has about chosen a balance between debt and equity, which increase the value of the investment; also it makes that the investment match with the asset financing.

Introduction The assignment is all about the profit maximisation and shareholders wealth and discussion of various method ofs used to achieve goal “congruence”.These apporoach had teach me some new things. Discussion on profit and maximisation and shareholders wealth A method that firms uses to work out the most effective output and worth levels so as to maximise its come back. the corporate can sometimes change influential causes like production prices, sales costs, and output levels as the easiest way of reaching its profit goal. There way to measure 2 main profit maximization ways used, and that they way measure Marginal Cost-Marginal Revenue and Total Cost-Total Revenue. Profit maximization may be a sensible issue for an organization,

According to the definition “The process of analyzing alternative long-term investments and deciding which assets to acquire or sell”. Capital budgeting is an important aspect for the company’s growth and productivity. To avoid company to financial problems capital budgeting is very important. To maximize the value of the company in the future capital budgeting techniques is important. According to Peterson [1] to correctly implement the capital budgeting techniques, following should be required.

Net income is a strong indicator of financial success, but EVA seems to go more concrete into the idea that it is a more accurate measure of a company’s profitability. According to the article and investopedia, to calculate EVA, you need to find the difference between net operating profit after tax and cost of capital and multiply it by total investment capital. EVA essentially unearths the cost of capital that net income or other financial measures ignore. In this case, EVA is a better indicator of which investments work for the company and if you compare it with other companies’ EVA, you can see if your business is outperforming them. b.

Using leveraged buyouts has it’s advantages where if it turns out well, it can help to develop and improve the economy as companies doing well can contribute to the growth of the economy. Although there are risks and disadvantages of leveraged buyouts, the advantages of it outweights the disadvantages. In order for companies to make a good rate of return, they have to take high risks or leverage.

They can enhance stock value as regulators and with the use of corporate mechanisms. Conversely, if they reduce the value of minority stocks it will reduce their stock value in the long run. A company’s financial health is directly correlated with the level of institutional investors which means that that the higher the level of investors the higher the financial health. Although the influential factors being studied were qualitative they can be explained using models which is why the author used economic models to determine their impact on stock

One cannot deny the importance of a good financial reporting system for ensuring sound corporate governance. There is now a clear need to restore confidence in capital markets and elsewhere by enhancing corporate governance in order to provide financial information of the highest quality. The lifeblood of markets is information and barriers to the flow of relevant information represent imperfections in the market. The need to sift and correct the information put out by companies adds cost and uncertainty to the market¡¦s pricing function. The more the activities of companies are transparent, the more accurately will their securities be valued.