Measuring Investment Returns:
Is there a typical project for this firm? If yes, what would it look like in terms of life (long term or short term), investment needs and cash flow patterns?
How good are the projects that the company has on its books currently?
Are the projects in the future likely to look like the projects in the past? Why or why not?
Capital Structure Choices:
What are the different kinds or types of financing that this company has used to raise funds? Where do they fall in the continuum between debt and equity?
How large, in qualitative or quantitative terms, are the advantages to this company from using debt?
How large, in qualitative or quantitative terms, are the disadvantages to this company from using debt?
From the qualitative trade off, does this firm look like it has too much or too little debt?
Optimal Capital Structure:
Based upon the cost of capital approach, what is the optimal debt ratio for your firm?
Bringing in reasonable constraints into the decision process, what would your recommended debt ratio be for this firm?
Does your firm have too much or too little debt:
Relative to the sector?
Relative to the market?
