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.
— etc
Structure of Assignment (2)
• 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 competitor
